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How Much Can You Really Improve Your Credit Score in One Year?

If you’re getting ready for a major purchase, then your first move is to check your credit score and determine if lenders will find you trustworthy. But finding a disappointing credit score can be a blow to your confidence.

Fortunately, there are steps you can take to improve your credit score within just a year. Here are a few of them:

Curb Bad Habits

If bad habits have gotten you into a credit score mess, take this advice:

1. Pay Bills on Time – Late payments can hurt your credit score. Be sure to pay bills on time, every time. Try setting up automatic payments. If that seems too risky, set calendar reminders. Keep in mind that if you do end up paying late, you can always call your creditor and ask for a good faith removal. If you’ve been an otherwise good customer, many creditors are willing to forego or remove the black mark.

2. Don’t Rack Up New Debt – One factor in credit score is your debt to credit ratio. If your credit cards are maxed out, your low credit score will show it. Try to limit the use of credit to maximize your credit score.

3. Avoid Collections, Judgments and Bankruptcies – Of course this is easier said than done when you’ve been in real financial trouble.  But derogatory marks negatively impact your credit report more than anything else. Avoid these at all costs.

Avoid These Credit Moves

1. Don’t Take on New Debt Applying for a new line of credit will cause your credit score to fall by a few points. To build your credit back up, be patient for now.

2. Don’t Close Old Accounts – It may be tempting to close old credit cards or other credit accounts once they are paid off. But, if you can avoid it, don’t. Lenders want to see a long credit history and a low debt to credit ratio. Keeping old accounts open – even if you don’t use them – makes your relationship with credit look healthier.

Other Tips to Boost Your Credit

1. Dispute Inaccurate Information – Erroneous information on your credit report can harm your credit. Scour your credit reports from all three major credit bureaus and dispute anything that looks wrong. The Federal Trade Commission put out a guide to disputing inaccurate credit report items.

2. Become an Authorized User – Becoming an authorized user on someone else’s credit card only requires that they add you to their account. Since this means no credit check for you and an increase in your potential debt to income ratio, it can mean a big boost for your credit score, too. The only trick is getting a relative or friend to trust you with their credit card if you have a checkered history with credit.

If you are careful with your money and keep an eye on your credit score, it’s possible to improve your number quite a bit in just the span of a year. Good luck!

Jennifer Dunn

Jennifer Dunn

Contributor at Fundera
Jennifer Dunn is a small business contributor for Fundera and owner of Social Street Media. She is also the community manager at GoDaddy Online Bookkeeping, and her long-standing life goal is to learn something new every day.
Jennifer Dunn