Are you ready to finally gain control of your credit scores in the new year? Working to improve your credit is an admirable resolution, and a very wise use of your time and energy.
And it’s more than simply scoring points in some kind of game. There are real financial benefits to boosting your credit score from, say, 670 to 800.
So, let’s get started: Here’s a 12-month game plan to lift your credit score this year.
January – March
Check Your Credit Reports and Create Your Plan
The first months of your credit improvement year should be spent preparing your plan. Step one in any effective credit renovation plan is to gain a clear understanding of where you’re beginning from. In other words, you need to check all three of your credit reports, reviewing each one from top to bottom with a fine-toothed comb. You can claim free copies of your credit reports at .
Once you’ve checked your credit reports, make a list of any errors or questionable information you discover. This is going to take some time, because you may not immediately recognize all of the accounts on your reports, especially if you have an extensive credit history. These are the items you’ll want to address as part of your strategy.
Dispute Any Errors
If you discover any errors or suspicious information on your credit reports, the Fair Credit Reporting Act (FCRA) gives you the right to dispute any such items with the three credit reporting bureaus (Equifax, TransUnion, and Experian). There’s no charge to dispute questionable credit report items on your own. However, some consumers prefer to hire and pay a reputable credit repair company to handle disputes on their behalf.
Either way, credit reporting errors should not be ignored, because they can be unnecessarily damaging to your credit scores. Any communication method you choose is fine, whether it’s online, via the mail, or over the phone.
Consider Automating Some Bills
The number one factor influencing your credit scores is how consistently you pay your bills –and whether you pay them on time, every time. Missed or late payments are a credit-score killer.
To that end, it may be worth setting up automatic minimum payments for some or all of your monthly obligations, so you never let a bill slip through the cracks. Just make sure you’re not putting yourself in a position where you risk overdrafting your checking account.
Cut Spending and Tackle Credit Card Debt
One of the most effective ways to improve your credit scores — and quickly — is to reduce your credit card balances. Look for areas to cut your monthly expenses, and use those savings to pay down your balances more aggressively.
You can use the ‘Debt Snowball’ method to pay down your credit card debt: List your credit card balances from highest to lowest and begin by aggressively paying down the card with the lowest balance first, while making the minimum payment on your other accounts to keep them current.
Once you pay off a card completely, you can climb the list to the next account and repeat the process. This method produces tangible, motivating results more quickly than tackling larger debts that will take much longer to eliminate.
April – June
Check Your Progress
As you’re working hard to achieve better credit, keep an eye on your progress by checking your credit reports from time to time. The above referenced website can only be used once every 12 months, but there are numerous websites which currently offer free credit reports.
You can tell if you’re getting legitimately free credit reports by choosing the sites that do NOT require you to give them a method of payment. If they’re asking for a credit card, then you’re not getting free credit reports.
Consider Establishing New Credit
Depending on your credit situation, it can sometimes be beneficial to establish new, positive credit accounts as you work toward improving your credit. If you have little to no current credit, this step may be especially worth considering.
Even with credit problems, you may be able to qualify for a secured credit card or a credit builder loan from your local credit union. Additionally, if a loved one is willing to help you out then you could be added as an authorized user to an existing, positive credit card account as well. You can’t have too much good credit on your credit reports.
July – September
Check Your Progress
During the third quarter of your credit improvement plan, it’s a good idea to check all three of your credit reports again (if you’re not already reviewing them monthly). You can also take a peek at your latest credit scores to see if your efforts at paying down your credit card debt and/or establishing new, positive accounts have paid off in the form of a higher score.
Consider Settling Defaulted Debts
Paying off or settling derogatory accounts such as collections, tax liens, or judgments may or may not improve your credit scores, because many credit scoring models are more concerned with the fact that negative items occurred at all rather than the actual balances on such accounts. However, ignoring those negative items could be a mistake.
If you ignore unpaid collections, for example, you could be faced with some very unpleasant consequences, such as being sued or even wage garnishment. Additionally, it can often be difficult to qualify for a loan with outstanding defaulted balances.
October – December
Check Your Progress – and Celebrate Your Success
In the final stretch of your credit improvement year, it’s still important to review your progress by re-checking your three credit reports and credit scores. Routinely checking your credit is a good habit you should carry with you into the future as well.
Continue to follow through on your plans to eliminate credit card debt and establish positive credit management habits on all of your current accounts. Great credit takes time, and there is no silver bullet — but each baby step will bring you a little closer to your goals of better credit scores.
Remember, even if you fall short of your overall credit goal in 2018, that doesn’t mean you failed. Any improvement in your credit scores is a good deal for you and will likely pay financial dividends.
Now the goal is to lather, rinse and repeat. Time generally heals credit wounds, and paying your bills on time and continuing to pay down credit card debt will always lead to higher credit scores.
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- Debunking Four Common Credit Myths
is an expert on credit reporting, credit scoring, and identity theft. He has written four books on the topic and has been interviewed and quoted thousands of times over the past 10 years. With time spent at Equifax and FICO, Ulzheimer is the only credit expert who actually comes from the credit industry. He has been an expert witness in over 230 credit related lawsuits and has been qualified to testify in both federal and state courts on the topic of consumer credit.