8 years ago my credit score was 585. I opened a secure credit card (yes they cost money, but when your credit sucks, nothing is cheap). Then after a year I was able to open an unsecured credit card account using the same company (capital one). From there, I worked on getting everything paid off and on time. My Equifax and Transunion scores are now 770 and my fico/experian score is 796. Nothing is going to happen overnight, it took years to get collection accounts and defaults (my student loan) off of my credit. I've even had a couple of car loans, one I paid off completely, the other I've almost got paid off.
The factors that will increase your credit score in order of impact:
- Paying all accounts on time
- Removing any delinquent accounts on your credit report by either dispute, payoff or patiently waiting for them to fall off your credit report.
- Increasing lines of credit and only using about 15% of it at most. 10% or less is ideal. This is much easier when you have tens of thousands of dollars in credit available.
- Never pummel your credit with a ton of inquiries. These don't have a huge impact on credit, but if you go an apply for 10 credit cards or loans in 1 month, that's going to take 2 years to get off your credit. The ideal number of hard inquiries if you have to apply for credit is 2- Don't bother applying for loans right now until your credit is mid-600's. You're just going to get denied and your credit will keep taking a hit.
- Never cancel an old credit card.
Do all of this for about 5-6 years and your credit rating will continue to increase. Keep in mind, credit ratings are just the billboard for creditors to see if you're worth looking into. Once they get into your credit report, especially if you are applying for a mortgage, there's much more than score that determines your credit worthiness.