One of the most searched for financial management topics on the internet is how to improve your credit score. Consumers are becoming more aware of the need to have good credit in order to improve their financial freedom and outlook. We’ll get to some tips below, but be assured that the best way to improve your credit is to pay bills on time and utilize only a small portion of your credit card capacity.

Many people think they have a great credit score only to find out that they grossly miscalculated. Late payments and using too much of their credit credit limit have traditionally been the biggest issues in lowering credit scores. When people realize they have to start changing their credit behaviors by making payments on time and paying off their credit cards, they see an almost immediate improvement in their score. Furthermore, studies have shown that people’s behavior improves dramatically when they are aware of and aggressively manage their credit score.

It is worth knowing that it takes more time to repair a bad credit score than it does to build a good one. Mistakes penalize your credit score and end up costing hundreds or thousands of dollars in higher interest rates when borrowing. A poor credit score also can be a roadblock to renting an apartment, setting up utilities, and maybe even getting a job.

So, let’s get started. First, you need to get your credit report to see where you stand. You are entitled to a free credit report every 12 months from each of the three major consumer reporting companies (Equifax, Experian, and TransUnion). You can request a copy from AnnualCreditReport.com.

You can request and review your free report through one of the following ways:


Online: Visit AnnualCreditReport.com
Phone: Call 1-877-322-8228
Mail: Download and complete the Annual Credit Report Request form. Mail the completed form to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

You can request all three reports at once or you can order one report at a time. By requesting the reports separately (for example, one every four months) you can monitor your credit report throughout the year. Once you’’ve received your annual free credit report, you can still request additional reports. By law, a credit reporting company can charge no more than $12.00 for a credit report.

Here are 10 things you can do now to improve your credit score:

Review Your Credit Report – Once you receive your credit reports, review them closely. Dispute any errors that you find. This is the closest you can get to a quick credit fix. Notifying the credit reporting agency of wrong or outdated information will improve your score as soon as the false information is removed.

Dispute Negative Credit – Under the Fair Credit Reporting Act (FCRA), both the credit reporting company and the information provider (that is, the bank, mortgage company, or other lender) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under this law, see our post about the detailing the way to repair your credit through the dispute process.

Set Up Payment Reminders – Write down payment deadlines for each bill in a planner or calendar and set up reminders online. Consistently paying your bills on time can raise your score within a few months.

Pay More Than Once in a Billing Cycle – If you can afford it, pay down your bills every two weeks rather than once a month. This lowers your credit utilization and definitely improves your score.

Contact Your Creditors – Do this immediately to set up a payment plan if you miss payment deadlines and can’t afford your monthly bills. Quickly addressing your problem can ease the negative effects of late payments and high outstanding balances.

Apply for New Credit Sparingly – Although it increases your total credit limit, it hurts your score if you apply for or open several new accounts in a short time period.

Don’t Close Unused Credit Card Accounts – The age of your credit history matters, and a longer history is better. If you must close credit accounts, close newer ones.

Be Careful Paying Off Old Debts – If a debt is “charged off” by the creditor, it means they do not expect further payments. If you make a payment on a charged off account, it reactivates the debt and lowers your credit score. This often happens when collection agencies are involved.

Pay Down “Maxed Out” Cards First – If you use multiple credit cards and the amount owed on one or more is close to the credit limit, pay that one off first to bring down your credit utilization rate.

Diversify Your Accounts – Your credit mix — mortgage, auto loans, student loans and credit cards — counts for 10% of your credit score. Adding another element to the current mix helps your score, as long as you make on-time payments.

How Long Does It Take to Rebuild Credit?

Typically, it takes at least 3-6 months of good credit behavior to see a noticeable change in your credit score. It is difficult to make a change any faster, unless the negative information on your credit report was a minor blip, like being late with bill payments one month.

While it is impossible to put a specific time frame on credit repair, it is safe to say the less negative information you have on your report – late payments, maxed out credit cards, constant credit applications, bankruptcy, etc. – the easier it is to repair your credit score.