How to Clean Up Credit in Six Months

Your credit report is very important to your life. It will determine whether you can afford your next mortgage. It may even determine if you can get the next job you apply for. Changing your credit could mean changing your life. If you start today, you will see results very quickly, in just six months. It may take determination and work, but the work is time limited.

Instructions

1

Get a a copy of your credit report. Go to AnnualCreditReport.com to get a copy of your free annual credit report. Doing so will allow you to see what bills you've been paying late and how much debt you have in your name.

2

Catch up on all of your late bills. Thirty-five percent of your FICO score comes from your payment history, according to MyFico. A FICO score is a number that lenders use to determine your credit risk. Take a look at your credit report and bring all of your past due bills up to date immediately.

3

Pay more than the minimum payment to reduce your debt to credit ratio. Thirty percent of your FICO score comes from the amount of debt you owe, according to Myfico. If you have more debt than available credit, your credit score could go down, according to Equifax. To reduce your debt, pay a lot more the minimum payment each month. If you can, take any extra money you get, and work to pay down your debts as quickly as possible during the next six months.

4

Don't open any new credit accounts. Credit inquiries will negatively affect your credit score. You don't want to undo all of the work you have done by opening new accounts. Instead, show creditors that you can clean up the credit you already have.

5

Pay down any credit cards that are at their credit limit. If your cards are almost maxed out, it will hurt your credit score. Look at how much credit you are using on each card and make large payments on those cards that are at their limit. Then, avoid maxing out cards in the future.