Your credit score can make or break your finances. It can determine whether or not you get approved for credit cards, auto loans, even renting an apartment. And, if your credit score isn’t in great shape, it can feel like a burden.

However, your credit score is always changing – and you can actually make changes yourself to improve it. By making small improvements and financial adjustments, you can watch your credit score increase. It just takes a little time.

Here’s a month-by-month breakdown that will help you improve your credit score over just one year.

Month 1: Take a Close Look at Your Credit Report

Before you can make any improvements to your credit score, you need to know exactly where you stand. 

Get a copy of your credit report, and take a close look at it. You’re able to get a free copy of your credit report annually – and you can get one copy from each of the three big credit bureaus. Contact these credit bureaus, and ask for a copy of your report so you can compare each one.

As you look at your credit report, note the following:

  • Are there are any discrepancies or errors?
  • Are there any accounts or transactions you don’t recognize?
  • How many hard inquiries do you have?
  • How many missed or late payments do you have? What kinds of loans or accounts are they for?
  • How much of your available credit are you using? 
  • Do you have any accounts in default?

Once you’ve combed through your credit report, you can begin to make a plan. In the months ahead, you’ll be making improvements and changes in a few different areas of your credit report.

Month 2: Dispute Any Errors on Your Credit Report

If you found any items on your credit report that you know are incorrect, your next step should be to try to get them removed. Removing errors or suspicious information from your credit report can increase your score – but these can only be removed if you ask.

The Fair Credit Reporting Act (FCRA) allows you to dispute any errors or unfamiliar information you find on your credit report with all three credit reporting bureaus. And you can do so for free.

All you need to do is contact each credit reporting bureau – Equifax, TransUnion, and Experian – either online, via the mail, or on the phone and let them know about the error. This will open the dispute process and get you started on working towards a higher score.

Once you report any errors you find, it can take some time before they’re removed. That’s why this is an important step to take early on in the process of improving your credit score. 

Month 3: Make a Plan to Pay All Bills On Time

The number one way to improve your credit score? Pay your bill on time – every time. 

The Simple Dollar reports that consistently paying your bills is the top factor for influencing your credit score. If you miss payments or make late payments, every one of those small details goes on your credit report. And a late payment can stay on your report, affecting your score, for years.

Make a plan to ensure your bills are paid on time every month. You can set up automatic payments for some or all of your bills. You can also make a calendar, set scheduled reminders, or even create a separate bank account that’s just for paying bills automatically.

With regular, consistent on-time payments, your credit score will begin to rise.

Month 4: Consider Consolidating Your Debt

If you have debt from multiple sources, like credit cards, auto loans, and student loans, you’ll have a few accounts in play affecting your credit score. However, all of those accounts – and all of that debt – adds up and has a big impact on your score.

Your credit utilization, or how much of your available credit limit you’re currently using, is one of the top influencing factors on your credit score. Credit reporting bureaus look at both how much of a debt you’ve paid off and how much you haven’t. And if you have a high credit utilization score – or you’re maxing out your available credit – your credit score will fall.

So, to help increase your credit score and lower your credit utilization, consider consolidating your debt. You can roll multiple debts together into one loan or under one lender, giving you just one monthly payment and one account. And that can make it much easier to pay on time.

You can consolidate credit card debt, student loans, and other types of debt or financing. Just search online to learn more about consolidation options for your specific accounts.

Month 5: Begin Paying Off Debts Using the “Debt Snowball” Method

If you’re trying to pay down any kind of debt, it can feel like an insurmountable mountain. It’s difficult to feel like you’re making an impact if you’re paying small accounts to various accounts month after month.

But if you want to make a bigger difference in both paying down your debts and improving your credit score, you should give the snowball method a try. 

Using the snowball method, you choose your debt with the lowest balance – like a specific credit card. You focus your payments on that card, aggressively paying it down and reducing what you owe. Meanwhile, continue making the minimum payments on your other accounts.

Then, when you’ve paid off that first balance, choose the next lowest. Repeat the system until you have it completely paid down. You’ll see tangible improvement in your debt and your credit, and it can motivate you.

Paying down and eliminating individual debts completely is one of the most effective ways to improve your credit score. So, make it a goal to tackle one debt at a time and begin paying it down as aggressively as possible this month.

Month 6: Settle Defaulted Debts

Do you have any debts or accounts that are currently in default? Accounts that are in default, along with collections, tax liens, and judgments, can seriously drag your credit score down.

And how badly they affect your credit score can vary. Some credit scoring models will rate only the fact that you have – or had – an account in default. Others will rate how big of a balance you’ve defaulted on.

But if you eliminate these items and begin making payments, you can work your way up from a lower credit score. Reach out to any lenders who you’ve defaulted on, and discuss a payment plan. Together, if you can come up with a plan to get the loan or debt in good standing, you can see a positive credit effect.

Month 7: Check Your Credit Utilization Ratio

Mentioned briefly earlier, your credit utilization ratio is a huge factor for your credit score. And, after you’ve followed the previous steps and begun working towards a better score, you’ll want to take a close look at your credit utilization ratio to see how it’s affecting your credit.

Lenders typically prefer to see credit utilization ratios of 30 percent or less. A ratio of 30 percent or less also translates to a good credit score.

If your ratio has decreased in the previous months, you’re on track to continue making progress. If your ratio is still high, you can take further steps to decrease it. You can stop using certain credit cards to lower your total credit used. You can also increase your credit limits by updating your account information or making monthly payments.

Month 8: Consider Using a Score Boosting Tool

By now, you’ve been working hard for months to see an improvement in your credit score. And if your credit is stagnating a bit, you can get a boost with new credit score boosting tools.

Offered by Experian and FICO, these score boosting tools were designed to help individuals who have limited credit histories or small credit profiles. They allow you to add outside information to your credit report to improve your credit score.

And you can choose between Experian Boost and UltraFICO. Experian Boost lets you connect your online banking information to credit bureaus, and you can also add your utility payment history. This will give you more opportunity to show on-time payments and money in the bank. UltraFICO links your bank accounts to your credit report so your finances can be included in your credit score.

Month 9: Avoid Any Hard Inquiries

To keep all of your positive hard work shining on your credit report, it’s important to practice some maintenance along the way. 

Heading into the final months of your year of credit improvement, you’ll want to be cautious and avoid getting any hard inquiries on your report. A hard inquiry occurs when a lender takes a look at your credit report. They typically happen when you’re applying for a new line of credit, like opening a new credit card or getting an auto loan.

And hard inquiries make a “hit” on your credit report. They cause your score to decrease. Though the decrease is typically only temporary, you don’t want to have many hard inquiries hitting your credit report and score when you’re working on improvement.

Month 10: Ask Credit Card Companies for a “Re-Aging”

Have you been paying down your credit card debt for months now, making a big difference in your debt? Your credit score can be a little slow to catch up. While most credit reports refresh with an updated score each month, sometimes it can take a bit of time before your positive payments have an impact.

So, if you’re wondering why your score isn’t as high as it should be, just ask. Contact your credit card company and ask for a re-aging. Your credit card company can “re-age” your account, or erase any past-due payment records and remove any outdated negative marks on your account. This will help reflect better when your credit score updates at the start of the next month.

A re-aging is especially helpful for those who’ve missed payments in the past but have made at least three on-time payments recently.

Month 11: Ask Other Lenders for “Rapid Rescoring”

Just like re-aging for your credit cards, you can also have other lenders adjust your account for a better, more accurate and up-to-date credit score. So, in the second-to-last month of your credit score progress, ask your lenders for a rescoring.

Also called rapid rescoring, this little trick can get your credit report updated fast. And it can also result in a higher, better credit score. For accounts like mortgages, auto loans, and potentially even student loans, a rapid rescoring can remove any old default mentions, missed payments, and other negatives on your account. And that can give you a nice boost once these fall off your credit report.

Month 12: Keep Your Old Accounts Open

As you wrap up your year of credit score progress, you’re likely ready to celebrate paying off debts and getting your credit in fantastic standing. However, there’s one more important step to take with those paid-off accounts: don’t close them. 

Although it seems smart to get rid of credit cards or other accounts once you’ve paid them off, doing so can actually hurt your credit score. The age of your credit, or how long you’ve had your accounts, is a positive factor for your score – and older accounts are a good thing.

So, keep at least one of those old accounts open. You can keep an old credit card around, using it every so often to keep it active. Just make sure you aren’t paying high fees or racking up big balances any more!