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From terrible to great credit in a year

Why wait years to repair your credit? Here's how to do it in 12 months


Having bad credit is distressing and limiting, but you can radically change your scores in less time than you may think. Here’s how to turn terrible credit into great credit in 12 months.

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Having bad credit is distressing but certainly not impossible to fix. In fact, with the right action, you can radically change your scores in less time than you may think. In most cases, making the effort to create high scores is important. Excellent credit will be instrumental in everything from renting a home to securing loans at the lowest possible interest rates – and getting credit cards with the very best rewards.

Mark your calendar for one year from today. Here’s how to turn terrible credit into great credit in as few as 12 months.

What is poor credit and what is excellent credit?

With the exception of your personal identification information, everything on your credit report will be factored into your credit scores. The most common scoring systems are those developed by FICO scores and VantageScore. Both of their consumer credit scores range from 300 to 850, though what is considered poor to excellent credit varies slightly between them:

  • Poor to fair FICO Scores: 300-669
  • Good to excellent FICO Scores: 670-850
  • Very poor to fair VantageScores: 300-699
  • Good to excellent VantageScores: 700-850

As an individual you have no control over which scoring model a lender will use to determine qualification or set terms, but you have total power over the data that is inputted into the algorithm that produces the score. It all comes from you and your credit usage, which shows up on your credit files compiled by the three main credit reporting agencies: TransUnion, Equifax, and Experian.

Your credit scores adjust when the data on your credit report is updated. In general, this occurs once a month.

Check your credit scores now to see where your credit stands. You can purchase your FICO Scores from and VantageScores from Some credit card issuers provide them for free to their cardholders, so check their websites to find out if yours does. Also get your credit reports from

Know what’s bringing your credit down

Review your credit reports carefully to understand why your credit scores are low. The clues should be obvious, and the amount of time and effort it will take to make improvements will be dependent on the severity of the damage.

The most important factors in FICO scores are payment history and credit utilization, so if many late payments are listed, you are significantly behind on one or more accounts or you’ve defaulted on your debt resulting in collection accounts, your scores will be on the low end. If you owe a lot of money compared to your credit card limit, that too will be factored in negatively. For VantageScores, total credit usage, balance and available credit, credit mix and experience, and payment history are the most influential factors.

“If you have a long history of delinquencies and collections on your reports as well as high credit utilization, bringing your scores up will be more difficult than if there isn’t,” says Jeff Richardson, spokesperson for VantageScore. Therefore, if you only have a few of these issues showing up, raising your scores will be faster and easier.

No matter where numbers are today, however, you can elevate them with specific action.

David Haskins, a marketing agency founder from Greenville, South Carolina, repaired his terrible credit scores in a year. After college, Haskins had let his student loans go into default, then mismanaged his credit cards.

“I was responsible for a few years but then I started to carry a balance, using credit cards as a bank account which I eventually stopped paying,” says Haskins. “I also had about $22,000 in student loans. I ignored the letters, and the fees and penalties racked up. The loans went into collections and the debt grew. By that point my credit was really bad.”

How to fix problems fast

Haskins was getting married, so wanted to fix his credit as quickly as possible. He entered into a plan with his defaulted student loans, negotiating the payments to an amount that fit his budget, and sent every payment on time. Because he was unable to get an unsecured credit card, he opened a secured credit card.

“That card had a very low limit so I couldn’t get into much trouble,” says Haskins. “The lady at the bank said to use it often and responsibly. So I used it for gas and food every month, and made sure I paid it off. I really had to show I could be responsible.”

Within six months the credit card issuer returned his $300 security deposit and converted the card to an unsecured account. Keeping that, he then opened another unsecured card, the Citi® Double Cash Card. “I developed really good habits and paid it off every month,” says Haskins. “I retrained my charging habits and turned my credit around in a year.”

Other strategies to rapidly elevate scores:

  • Satisfy debts that have gone into collection agencies. “The new scoring models for both FICO and VantageScore will ignore paid collections, so pay them off!” says Richardson, explaining that an account in collections can bring your credit score down by 60 to 100 points. “Once those are no longer calculated, you will see a big difference in your scores.”
  • Bring delinquent accounts current. If you’re behind on credit card or loan payments, ask the lender if you can pay everything you owe to bring the account current. This way, it will not be reported as delinquent. “Toward the end of the 12-months period, you should see your scores recover,” says Richardson.
  • Dispute mistakes. “Always consider that there could be an error on your credit report that is being inputted into your scores,” says Richardson. Use the dispute process available on the credit reporting agency’s website to have the item removed. Once it is, the next time your credit scores are calculated, it will be based only on the accurate information – and you should see an immediate improvement.
  • Consolidate your credit card debt with a loan. If high credit utilization is hurting your scores and you can’t pay off big balances with assets, Richardson suggests using a debt consolidation loan. Installment loans are not included in utilization ratios, so your scores should rise after you bring your credit card debt to zero. Just make sure you can handle the loan payments on a regular basis, and that you don’t use the cards and rack up more debt again.
  • Become an authorized user on a well-managed credit card. Lyle Solomon, an attorney and financial writer from Auburn, California, recommends adding positive information to your credit report with the assistance of a friend or family member, especially if you can’t qualify for your own accounts quite yet. “You can become an authorized user on your parent’s credit card,” says Solomon. “It will help you improve your score because you get added to a credit account that is in good standing.”
  • Request a credit line increase. When you have a few months of steady payments noted on your reports, contact your credit card issuers to see if they’re willing to increase your limit, says Solomon. If high credit utilization was one of the major problems, broadening your credit limit (so you owe less compared to your total credit) can make a major difference in your score, particularly if you can bring the balance below 30% of the credit line.
  • Start now and don’t stop. The sooner you begin, the faster you will start to see positive changes in your credit scores. You won’t be able to remove negative but accurate information such as delinquencies and loan defaults from your credit report until they naturally age off after seven years (Chapter 7 bankruptcy after 10 years), so concentrate on filling your file with attractive data. While you do, time will work its magic. “Credit scoring models are meant to diminish negatives as they get older and older,” says Richardson. “Some things you have to wait out.”

As for Haskins, transforming his credit scores was well worth the effort. “It was like I started in the valley and climbed Mount Everest!” he says. “Now my scores are usually between 790 to 810, but I’ve hit 850.”

Today, Haskins holds the Centurion® Card from American Express, an elite account reserved for those with the highest credit ratings. And it all began with raising his scores in that initial year.

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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