{"id":1934,"date":"2025-01-22T07:48:38","date_gmt":"2025-01-22T15:48:38","guid":{"rendered":"https:\/\/qa.simplifimoney.com\/blog\/winning-back-your-finances-how-increase-your-credit-score-6-months\/"},"modified":"2025-01-22T07:48:38","modified_gmt":"2025-01-22T15:48:38","slug":"winning-back-your-finances-how-increase-your-credit-score-6-months","status":"publish","type":"post","link":"https:\/\/www.quicken.com\/blog\/winning-back-your-finances-how-increase-your-credit-score-6-months\/","title":{"rendered":"How to Increase Your Credit Score in 6 Months"},"content":{"rendered":"\n

When it comes to personal finances, knowing your credit score is extremely important. So what exactly goes into your credit file? Let\u2019s talk about it.<\/p>\n\n\n\n

Credit scoring is a complex science that\u2019s something of a secret to the general public. While there are variations in the scores used by different credit reporting agencies, the industry-standard score is issued by FICO. <\/p>\n\n\n\n

Now, the exact methods behind FICO\u2019s calculations aren\u2019t exactly public knowledge, but they do publish the broad categories used for scoring \u2014 along with the percentage of importance for each category. You won\u2019t be able to predict the exact number of points you can increase your score by over a six-month period. However, you can move your score in the right direction by improving your credit behavior across the FICO scoring categories.<\/p>\n\n\n\n

Want the quick and easy takeaways? <\/strong>Jump to them<\/strong><\/a>.<\/strong><\/p>\n\n\n\n

\n

See how Quicken helps you track your finances.
\n Get started \u2192<\/a><\/p>\n<\/div>\n\n\n\n\n

1. Pay on time (35% of your score)<\/h2>\n\n\n\n

The most critical part of a good credit score is your payment history. Unfortunately, this is the hardest to increase over a short time period \u2014 like six months.<\/p>\n\n\n\n

\u201cThe longer you can make payments on time, the higher your credit score will tend to go,\u201d according to L.A.-based CPA Jeff Gonzalez. He continues, \u201cBy the same token, the further you can put late payments in the past, the more your current payment record will stand out.\u201d <\/p>\n\n\n\n

Overall, your payment history counts for 35% of your FICO score, so this is an important area to attack if you want improvement<\/a>. If you want to raise your score in just six months, make sure you keep your accounts current \u2014 missed payments are step backwards. Check in with each of your credit card issuers and other lenders to make sure you don\u2019t miss any due dates.<\/p>\n\n\n\n

The best way to mitigate missed payments and keeping your credit card accounts current? Set up automatic payments and make sure any other authorized users are on board with the plan!<\/p>\n\n\n\n

2. Reduce your debt (30% of your score)<\/h2>\n\n\n\n

The amount of debt you have is nearly as important as your payment history when it comes to your credit score, clocking in at 30% of your FICO score. The good news? This is likely to be the easiest way to improve your score over a short time period. <\/p>\n\n\n\n

\u201cFor maximum effect,\u201d notes Gonzalez, \u201cjust pay off your debt.\u201d When you pay down debt, your score improves not just because of your reduced debt level, but also because of lowered credit utilization, or the amount of available credit that you currently use. <\/p>\n\n\n\n

If you reduce your credit utilization from 80% to 10% or less, for example, you should see a major bump in your score.<\/p>\n\n\n\n

For example, if you have two credit cards that each have a $3,000 maximum, that\u2019s a total of $6,000 you could borrow. Instead of maxing those cards out, keep them to no more than $600 total between the two of them, which is 10% of that $6,000. <\/p>\n\n\n\n

Sticking to this can keep you away from bad credit<\/a> \u2014 so keep your credit card balances in check!<\/p>\n\n\n\n

Gonzalez also recommends asking for a credit limit increase if you can\u2019t manage to pay down your credit card debt right now. \u201cRaising your credit line automatically decreases your credit utilization, so it\u2019s a nifty way to help your score without costing you a dime.\u201d<\/p>\n\n\n\n

\n

See how Quicken helps you manage your debt.
\n Get started \u2192<\/a><\/p>\n<\/div>\n\n\n\n\n

3. Keep cards open over time (15% of your score)<\/h2>\n\n\n\n

Keeping cards open, even if you don\u2019t plan on using them, does a couple of great things to build credit. First, it keeps your total credit limit higher, which makes it easier to use just 10% of that total. <\/p>\n\n\n\n

For example, let\u2019s say your total credit limit across all your cards is $12,000. You can borrow up to $1,200 and still only be at 10% of that total. But if you close one of those cards that has a $3,000 limit, your total limit drops to $9,000. You\u2019d have to keep your balances below $900 instead of below $1,200. So keep those cards and credit lines open!<\/p>\n\n\n\n

Additionally, 15% of your FICO score is based on the length of your credit history. If you close an account you\u2019ve had for a while, you lose that history. While you can\u2019t change the total length of your credit history overnight, keeping your lines of credit open over the next 6 months will give you a credit history that\u2019s 6 months longer than it was before \u2014 just don\u2019t close any older accounts during that time. <\/p>\n\n\n\n

4. Avoid credit applications (10% of your score)<\/h2>\n\n\n\n

Although new credit only accounts for 10% of your FICO score, credit inquiries knock an immediate 5 or 10 points off your score. If you\u2019re trying to improve your credit score, the last thing you want to do is open new accounts. <\/p>\n\n\n\n

\u201cYou may get a small bump from the decreased credit utilization ratio that results from a new credit line, but the fresh credit inquiry is likely to counteract that gain,\u201d says Gonzalez. <\/p>\n\n\n\n

Things like car loans<\/a> and store cards count too, so if you want to raise your credit score, try not to take out a new car loan or apply for new credit cards. Do your best to put off new purchases that would require new credit. Instead, save up the cash you need ahead of time wherever you can.<\/p>\n\n\n\n

Remember, this is only affected by \u201chard inquiries\u201d that actually hit your credit. You can check your own credit score as often as you like, but if a store or other lender checks it because you\u2019re interested in a credit card or a loan, that can hit your credit score even if you decide not to take their offer. Plus, once that hard inquiry is in your credit record, it will stay there for 2 years.<\/p>\n\n\n\n

5. Keep a smart mix of credit types open (10%)<\/h2>\n\n\n\n

The last 10% of your score has to do with your credit mix \u2014 because credit comes in 2 basic types:<\/p>\n\n\n\n

    \n
  1. Revolving credit<\/strong> \u2014 flexible credit you can use when you want to, like credit cards and store cards<\/li>\n\n\n\n
  2. Installment loans<\/strong> \u2014 loans for a set amount that you pay off over time, like car loans and student loans<\/li>\n<\/ol>\n\n\n\n

    Ideally, creditors like to know that you have a good track record managing both kinds of debt, but you don\u2019t want to open new credit accounts or loans to \u201cfix\u201d this one. Remember, applying for a new loan will often hurt your credit score more than it will help, and your mix of credit is only about 10% of your credit score.<\/p>\n\n\n\n

    What you can do is choose wisely when you\u2019re paying off your debt:<\/p>\n\n\n\n