How Much Can Your Credit Score Increase in Six Months to a Year?

There are many reasons for wanting to increase your credit score. A low credit score makes it difficult to get a loan, a mortgage, a car or a credit card. With many employers running credit checks on potential employees, it can even keep you from getting a job. The time it takes to raise your credit score depends on many factors, including what score you start with.

Your Credit Score

Every time you borrow money, the lender reports it to one or more credit bureau. If you default on a debt, miss a payment or are late by as little as a few days, the lender may report this, too. The credit bureaus aggregate all of this information into a credit report. The next time you apply for a mortgage, a credit card or any other type of loan, the lender will check your credit report to determine your creditworthiness. To make it easier for lenders, credit bureaus convert your credit history into a single three-digit number. This is your credit score.

Multiple Scores

There are three main credit bureaus in the United States: Equifax, Experian and TransUnion. Each one uses a slightly different formula when calculating credit scores. The formulas are kept secret, but we do know what sort of information goes into the calculation. This includes your total debt, your repayment history, the length and diversity of your credit history and the number of recent applications for credit. Depending on the credit bureau, your score may be lower or higher, as the same information may be weighed differently.

Raising Your Credit Score

The quickest way to raise your credit score is to find and correct errors on your credit report. A small typo can sometimes lower your score by as much as 50 points. You can get a copy of your credit reports directly from the bureaus or from AnnualCreditReport.com. If you find an error, file a dispute with the bureau. If the bureau finds in your favor, they will fix the mistake and raise your credit score. This can take as little as 30 days.

Another quick way to raise your score is to pay off a large amount of debt. If you're close to maxing out your credit lines, paying off that debt will have a significant affect on your score. Depending on your circumstances, you may be able to raise your score by 50-100 points in several months.

Time Frame

If you're not careful with your fiances, you can destroy your credit score in as little as a month. The length of time it takes to raise it depends on many factors. If you have a very low score (below 500) and an extensive history of missing payments, you can improve it by 50 points in a year just by making every single payment on time. However, if your score is closer to 700, making regular payments won't raise it by very much. If you have a bankruptcy on your file, no amount of diligent repayments will erase it. It will stay on your credit report for up to 10 years, significantly lowering your score.

Warning

There are many companies promising to increase your credit score within a matter of months or even weeks. Don't believe them. Unless there is a major error on your credit report that is corrected, you cannot improve your score overnight. No one can erase accurate negative information from your report. For most people, it takes several years to rebuild a damaged credit history and raise a credit score by 100 to 200 points.