Home > 2014 > Credit Score

The Secret to Improving Your Credit Score in 6 Months

Advertiser Disclosure Comments 0 Comments

Like flossing your teeth or regular exercise, paying more than the minimum payment on your debt is one of those habits we know is good for us, but is easy to let slide. Let’s face it: it’s hard to stay motivated when you are trying to chip away at a large balance and there are always other things you can spend your money on.

But what if paying more than the minimum means that you can not only see improvement in the amount you owe, but also know you are helping your credit scores as well? Perhaps that double dose of incentive will be enough to keep you on track!

When it comes to your credit scores, paying just the minimum due on time is sufficient — at least when it comes to the payment history portion of your credit scores. But the debt you carry is the second most important factor used to calculate credit scores, and here paying the minimum might not cut it. If any of your credit card balances total more than 20 – 25% of your total credit limit on that account, then your score is likely suffering, and continuing to pay little amounts each month won’t help your score anytime soon.

The good news is that if you can find a way to pay extra, this can be one of the easiest areas of your credit score to “fix.”

Here’s an example from someone we’ll call “Peggy” who is carrying $2,562 in credit card debt. Her credit score is 713, which just slightly under the national average of 714 for the scoring model used here.

Credit Score

But she could be doing better. Credit scores are influenced by five major factors — age of accounts, inquiries and credit mix, in addition to payment history and debt usage. So while she is scoring well for most of those factors, her debt is bringing down her credit scores because she’s using 43% of her available credit limits.

Reducing her debt will not only save Peggy money in interest but can also boost her credit scores over time.

How much?

Peggy may be able to bring her score up to just shy of 750 in six months by paying down her balances to 10% of her available credit. That would place her solidly in the “excellent” credit category. To do that, she will need to pay an extra $326 a month for the next six months:

What if Peggy can’t afford to pay an extra $326 a month toward her debt? Paying extra toward her monthly payments can still help. If she could add $175 a month to her payments, for example, she may still be able to raise her credit score from 713 to 736 in six months. That’s excellent progress.

Credit Score

You can find out how your debt is impacting your credit scores, and learn how making more than the minimum payment can help you save money and affect your credit by setting up your own free account at Credit.com. From there, you can also create a personalized action plan to get where you want to be.

More on Credit Reports and Credit Scores:

Main image: GoldStock; other images from Credit.com

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team