To be on the safe side, don’t dispute more than three or four negative items at once, unless your disputes are related. And don’t pay anyone a fat fee to do this for you.

One simple way to improve your ratio is to redistribute your debt. If you have a big balance on one card, for example, you could transfer at least some of the debt to other cards. It’s typically better for your scores to have small balances on a number of cards than a big balance on a single card.

You also could investigate getting a personal installment loan with your local credit union or bank, and use the money to pay down your cards. Applying for the loan may ding your scores a bit, but that’s likely to be more than off¬set by the improvement to your scores from reducing the balances on your credit cards. (Credit scoring formulas are much more sensitive to the bal¬ances on revolving debt, such as credit cards, than to the balances on installment loans.)

A riskier strategy might be to take out a 401(k) loan. These loans don’t show up on your credit report, but you do face a big hazard: Ifyou lose your job, you typically have to pay the money back quickly or you’ll incur taxes and penalties on the balance. If you decide to take a 401 (k) loan, make sure you’ll be able to repay the loan quickly to minimize the risk.

Whatever you do, don’t cash out a 401(k) or withdraw money from an IRA to payoff credit card debt. A few points’ difference on your credit score is not worth the short-and long-term costs you’ll pay for a premature withdrawal.

Although moving debt around can lift your scores, the best strategy for your numbers and your finances long-term is to payoff revolving debt either out of your current income, using cash that’s sitting in a savings account, or selling stocks or other investments, so long as they aren’t in a retirement account.

• They can’t deal with you directly as a consumer-Rapid rescoring is typically offered by small credit-reporting agencies, which serve as a kind of middleman between the bureaus and the lending professionals.

These agencies, which are often independent but which might be subsidiaries of credit bureaus, provide special services for loan officers and mortgage brokers such as merged or “3-in-1″ credit reports. To benefit from rapid rescoring, you need to be working with a loan officer or mortgage broker who subscribes to an agency that offers the service.

• They can help you only if you have proof, or if proof can be obtained. Rapid rescoring services aren’t designed to help people who have yet to start the credit-repair process. You need something in writing, such as a letter from the creditor acknowledging that your account was reported as late when you were in fact on time. (This is one of the reasons that it’s so important to get everything in writing when you’re trying to fix your credit.) If you don’t have such proof, but the creditor has acknowledged the error, some rapid rescorers can get the proof for you. However, that might add days or weeks to the process.

• They can help you get errors fixed, but they can’t remove true negative items that are in dispute. Again, you need proof that a mistake was made, not just your say so. If the credit bureau is already investigating your complaint about an error, the item typically can’t be included in a rapid rescoring process.

• They can’t promise to help your score, sometimes removing negative items can actually hurt a score.

The scoring formula tries to compare you to people who have similar credit histories. If you’ve been lumped into the group with a bankruptcy or other black marks on your report, you might find that your score falls when some of those negative items are removed. Instead of being at the top of the bankrupts’ group, in other words, you’ve dropped to the bottom of the next group-the folks who have better credit.

More commonly, removing an error might not help your score as much as you might have hoped and might not win you a better interest rate. There are no guarantees with rapid rescoring.

Paying Old Debts Might or Might Not Hurt Your Credit Score

For years, a quirk in the credit-reporting process meant that paying old debts could actually hurt your credit. When the creditor or collection agency updat¬ed your credit report to reflect the payment, the FICO formula was often fooled into thinking the old, troubled account was newer than it actually was. Because the formula is designed to weigh recent behavior-good and bad- more heavily than past behavior, anything that looked like you had incurred recent problems could really hurt.

Fair Isaac worked with the credit bureaus to fix this problem. The issue can still pop up, though, if your lender is using an old version of the FICO formula to compute scores. Fair Isaac spokesman Craig Watts said the company doesn’t know how many lenders use the old versions, but he thinks it’s a “very small percentage” of the total. Still, it’s possible that paying old debts could hurt you in the eyes of some creditors.

Just Contacting an Old Creditor Can Leave You Vulnerable to a Lawsuit

Each state has different guidelines on how long a creditor can sue you over a debt, but some states have provisions that allow this statute of limitations to be extended if you make a payment on an old debt or even acknowledge that you owe it. You could be making a good-faith effort to pay your bill or be talked into making a “token” payment as part of negotiations with a collec¬tion agency, and the creditor could use that as an excuse to haul you into court and get a judgment against you-an action that might not have been permitted if you had just left the debt unacknowledged and unpaid. The judgment would be a new and serious black mark on your file that could be reported for another seven years.

You’re Often Not Dealing with the Original Creditor

The company that you owe the money to might have long since cleared the debt off its books, taken a tax write-off for the loss, and sold the debt, usually for pennies on the dollar,to a collection agency. The original creditor might not accept money if you tried to offer it, but would instead direct you to the collector. Many people understandably feel less obligated to a collection agency that bought their debts for a tiny fraction of face value than they do to the company that originally extended the credit.

You Might Be Exposing Yourself to Some Pretty Nasty Characters

Despite laws designed to curb them, many collection agencies employ people who lie to, harass, and abuse borrowers. They might scream at you, use obscene language, or threaten you with jail time. (All of these actions are, of course, illegal, but if you don’t believe they happen, you need to take a look at my mailbag.)

Even if collectors are polite to your face, they might do things behind your back to further endanger your financial life. Collectors might promise to drop a harmful remark from your credit file, and then not follow through or make the black mark even worse. They might arrange a deal that they say will settle your debt, and then sell the unpaid portion to another agency that renews collection activity. Or they might report any debt you didn’t pay to the IRS, which can tax the so-called forgiven debt as income.

More than a few collectors feel that anything they do is justified because, don’t you know? debtors are bad people. The fact that owing money is usually not illegal-but that violating fair credit¬reporting and collecting laws is-remains a distinction that completely escapes them.

Although your first few credit accounts serve to build and improve your credit history, there typically comes a point when each subsequent credit application can reduce your score. Where that point is, no one knows for sure; all Fair Isaac will say is that it depends on the other information in your file.

That shouldn’t keep you from applying for a car loan if you need a new vehicle, or getting or refinancing a mortgage. But if you already have three or four major bankcards, you should think twice before applying for another one.

You also should resist the urge to apply for those “instant” accounts retail stores are always pushing. Sure, you might save 10 percent on your current purchase, but you could wind up paying more in overall interest if the application lowers your score.

Closing older accounts can also hurt you, because the formula notes both the age of your oldest account and the average age of all your accounts. It’s particularly important to keep your oldest account active, because shutting it could make your credit history look years younger than it actually is-and your score could drop as a result.

It may not be enough, by the way, to keep your oldest credit card in a drawer. If you don’t charge something occasionally, your lender could decide the inactive account is more trouble than it’s worth and close it for you. To keep it active, you might want to charge some small, recurring bill to the card-a magazine subscription, your gym membership dues-and arrange to have the balance paid off automatically each month.