How to Increase Your Credit Score in 1 Year

According to Experian, the average consumer's credit score is between 600 and 750, and the credit reporting agency considers anything above 700 to be a good credit score. This means many people fall below the good range. Raising a credit score is not easy, but is possible. With a little diligence, anyone can raise their credit score in one year.

Instructions

1

Log on to www.annualcreditreport.com and complete the required information to obtain a copy of your credit report from each of the three credit bureaus. Print all three reports.

2

Review all three reports carefully. Circle any errors you find in the reports.

3

Complete a dispute letter for every error you find on your credit report. Provide as much information as possible proving why there is an error. Attach a copy of your credit report with the error circled.

4

Send the dispute letter certified mail to the credit reporting agency. Make a note of the date you sent the letter. If you have not received a response after 31 days, send a second letter certified mail requesting information on the disputed item.

5

Once you receive notification that the investigation of the disputed item is complete, ensure the credit reporting agency removed or corrected the item on your report.

6

Gather all of your current debts. Make a note of the due date, minimum payment due, and outstanding debt for each credit card or loan.

7

Gather all of your current living expenses. Make a list of the total amount needed for each expense. Subtract these amounts from your take home income. Make a note of any excess income.

8

Divide 10 percent of the total excess income and set this money aside each month to cover any unexpected expenses.

9

Divide each of the minimum payments due from the remainder. If an excess remains, apply this amount to the credit card with the highest balance.

10

Pay the minimum payment due on every debt by the due date every month for 12 months.

11

Pay the minimum payment due as well as the excess money amount to the credit card with the highest balance. Once this card is paid in full, repeat this process for the credit card with the second highest balance.