1 Go to annualcreditreport.com and get a free report. Correct any errors.
2 Pay your bills on time. You must never be late even once. Set up automatic payments.
3 Work on getting your credit balances below 30 percent of your maximum credit limit.
4 Do not apply for new credit, but if you are offered an increase in credit limits on your existing accounts, take it. This can raise your score, but remember you still need a clean record of payments.
5 Do not make new credit charges.
6 If you have unused credit accounts, don't close them if you are planning to apply for a mortgage. That can actually make your score drop.
7 During your credit improvement year, don't buy a car. Lenders don't want to see buyers committed to several new, large credit accounts. Never finance a car before you apply for a mortgage. Never take out new credit card accounts before you apply for a mortgage.
8 Use caution with store accounts that offer a hefty discount on purchases if you apply for a card. Although some stores say they do not make a hard credit inquiry, a new account on your credit report is probably not what you need if you are trying to improve your score.
However, if your credit history is thin, you might take out a store account, providing you make several payments on time and then pay off the balance.
Rick Good spent ten years in the newspaper business, including with The News & Observer (Raleigh, NC) and The Greenville News (Greenville, SC). He co-wrote, with Melinda Coleman, Rutledge to Riley: Governors of South Carolina, 1776–Present (Published by The Greenville News), and is the author of Mind Games Trivia #1 (Amazon). He has recently spent 15 years creating original trivia content through Sounds Good Mobile Entertainment and continues that with his new company, SGME Software. He edits The Smart Reader’s money, real estate, and business coverage.