I Raised My Credit Score by 100 Points in Less Than a Year. Here's How I Did it

If you've spent any time in the personal finance space (perhaps by hanging out here at The Ascent?), you've no doubt read a lot about credit scores. Your credit score has a big impact on your financial life -- finance guru Tori Dunlap calls it your "adulting GPA." This three-digit number tells lenders what kind of borrower you are and whether you can be relied upon to pay back loans, credit cards, and more.

I recently boosted mine by 100 points in just eight months. This is a dramatic jump, to be sure, but just about anyone could take the steps I did and improve their own score, even by just a little bit. Even a modest improvement can help you get lower rates on loans and a greater likelihood of being approved on a credit card application.

Beginning score: 727

My financial life has been a mixed bag. I bought a house I couldn't afford when I was in my 20s, and it took me several years to get free of that boondoggle with a short sale. But after the credit score hit I took from that, I decided to stay on top of what I could control. Namely, making on-time payments to my creditors. I haven't made a late payment to any of them in the wake of the house debacle, and as a result, I was managing to keep my credit score in the lower 700s (which is in the "good" range for FICO® Score). This was despite being deeply in debt, too. Payment history makes up the largest percentage of your FICO® Score, accounting for 35%. And if you think about it, that makes sense -- if you make your payments on time and in full, that tells lenders you're good at managing credit. As of July 2022, my FICO® Score stood at 727. I credit this to my stellar payment history as well as maintaining older credit accounts -- this was a year before I decided to cancel my oldest credit card. Length of credit history makes up 15% of a FICO® Score.

After eight months: 827

In late 2021, I started looking for a side hustle to help me pay off debt and perhaps start saving money to buy a home. I'm not the kind of person who knows how to do anything halfway, so once I found a side gig, I threw myself into working long hours and rolling my money into debt payoff.

I finished paying off what I owed in October 2022, but it took several months for my FICO® Score to finish growing by 100 points. This makes sense; the three major credit bureaus have different reporting schedules, and in fact, we all have multiple credit scores. FICO® Score is the one used by 90% of lenders, however. As of March 2023, I had reached 827.

Where did that 100 points come from? By this point, I was still maintaining all my old accounts, and I had added just one (which had boosted my total credit limit significantly). Meanwhile, since I had paid off debt, my credit utilization ratio (reflected in 30% of a FICO® Score) had gone down to a tiny percentage. Your credit utilization ratio is the amount of credit you're using at any given time; it's recommended that you keep it under 30% to avoid credit score damage. The mix of continued on-time payments, a long credit history, a higher credit limit, and a very low credit utilization ratio gave me a credit score in FICO's "exceptional" range.

Want to boost your credit score?

If your credit score could use some work, here's how you can improve it.

• If you're carrying debt month to month like I was, see if you can get some of it paid off. I recognize that not everyone will be able to spend as much time working a second job as I did, but even picking up a casual side hustle or getting a raise at your regular job can help immensely.
• Commit to making on-time payments. Remember, payment history is 35% of your FICO® Score, so it really, REALLY matters.
• It's a good idea to get a copy of your credit report and pick through it for errors. If you spot old delinquent accounts that should've fallen off your report, you can dispute them with the credit bureau that issued the report. The same goes for errors, like accounts that were never yours.
• Apply for new credit sparingly. During the eight-month period where I saw this credit score gain, I applied for exactly one new credit card: a grocery rewards credit card that is now earning me cash back on one of my biggest expenses. Credit cards are a useful financial tool, and it's worth taking the time to find the right ones for you before you apply.

Take a deep breath, check your credit score (and credit reports), and make a plan to boost it. Your future self will thank you.