How Can I Raise My Credit Score in One Year?

It doesn't take much time to lower your credit score, but raising it is a different story. Once creditors have been burned, it's going to take some time for you to win their trust again. One year is plenty of time to raise your credit score. All you have to do is fix the mistakes you've made and avoid making them going forward. Once you have made these adjustments, your credit score will improve steadily.

Instructions

1

Examine your credit report and fix any mistakes you find. A 2004 survey by the U.S. Public Interest Research Group found that 25 percent of credit reports contained errors serious enough to lead to a denial of credit. Dispute any serious errors by writing to the credit bureau that reported them.

2

Get past-due accounts current as soon as possible. Concentrate on accounts that are 30 days or more past due as these are the ones that ding your credit score the most, by as much as 60 to 110 points, according to Liz Pulliam Weston, a personal finance columnist for MSN Money.

3

Pay down debt. A large portion of your credit score is based on what's called your debt-to-available credit ratio, or the amount of credit you have available divided by current debt. CreditCards.com recommends keeping this ratio below 35 percent. Paying down debt is also important in avoiding high interest payments; the more interest you pay, the less of your payment goes toward principal.

4

Use credit responsibly going forward. Use credit cards only for everyday purchases that you can afford to pay off every month, or for emergencies. Pay bills on time every month, and pay off in full when possible. If you can't pay off entire balances, pay as much as you can.

5

Refrain from opening new credit card accounts or closing old ones. Opening new cards can lower your score slightly, while closing accounts can remove positive credit history and also lower your available credit, which can cause your debt-to-available-credit ratio to rise.

6

Ask for a break. Pulliam Weston says that if you have been a good customer, your lender or credit card company may agree to erase a late payment. She recommends making the request in writing and says your chances will be better, the better your history is with the lender and the better your credit is overall.