What People Did to Raise Their Credit Scores by at Least 100 Points in a Year
Do you want to increase your credit score by 100 or more points in one year? An analysis of the credit reports of almost 1,500 LendingTree users shows that most who did made a big dent in their debt — along with other positive financial changes — to see that significant improvement.
While shrinking your debt is easier said than done, the unambiguously good news in this analysis is that the right moves can lead to massive changes in your credit score. Between October 2022 and October 2023, the 1,496 people whose credit reports we reviewed anonymously saw their scores increase by an average of 127 points — from 548 to 675, moving from the high end of what’s considered a poor credit score to the low end of good. That’s a big deal.
The goal of this report was to better understand why that growth happened. To do that, we looked at the following: average total debt balances; average total monthly payments; balances for individual types of debt, including mortgages, credit cards, auto loans, student loans, personal loans and others; the number of active loans; the number of active credit cards; credit utilization; and the on-time payment percentage. Some clear takeaways emerged.
Of course, there’s no guarantee your score will change as dramatically as those of the people whose credit reports we reviewed. Credit, after all, tends to be a marathon rather than a sprint, and there are a million variables. Still, this report shows that if you’re willing and able to make major changes to your financial situation over a year, major changes can come to your credit score.
Here’s what we found …
Key findings
- Between October 2022 and October 2023, our sample’s average credit scores increased by 127 points (or 23.1%) from 548 to 675, moving from the high end of poor to the low end of good. Overall, 12.9% of our sample moved from a poor score to a good or higher score, 11.4% went from a fair score to a very good or excellent score and 12.0% jumped from a good score to an excellent score.
- Among our sample, the average debt balance fell by nearly 20%. This group’s average total debt balance fell from $110,192 in October 2022 to $89,707 in October 2023. That’s a decrease of more than $20,000, or 18.6%. The average monthly payment shrunk, too, falling by $340, or 23.5%.
- Credit utilization was cut by more than two-thirds. The average utilization — how much revolving debt you have compared to your available credit limit — plunged from a credit score-wrecking 62.0% to just 18.7%. Revolving debt is primarily made up of credit card debt, and 44.5% of the group we reviewed slashed their credit card debt by at least 90%.
- Bills were paid on time more often. Nothing matters more to your credit score than your ability to consistently pay your bills on time. Among the reports we reviewed, the average on-time payment rates increased from 93.8% to 97.9%.
- The average number of active accounts fell. The average LendingTree user whose report we reviewed held 9.5 active accounts, down from 10.5 the previous year. Overall, about two-thirds of people reviewed either decreased or left unchanged the number of accounts they held. 13.9% of people who increased their credit score by 100 points or more took out a personal loan, 10.3% took out an auto loan and only 2.5% took out a mortgage.
People who raised their credit scores by at least 100 points in a year
| Average | 2022 | 2023 | Difference | % change |
|---|---|---|---|---|
| Credit score | 548 | 675 | 127 | 23.1% |
| Total balance | $110,192 | $89,707 | -$20,485 | -18.6% |
| Total monthly payment | $1,447 | $1,107 | -$340 | -23.5% |
| Mortgage balance | $66,466 | $56,337 | -$10,129 | -15.2% |
| Credit card balance | $10,287 | $2,614 | -$7,673 | -74.6% |
| Auto loan balance | $14,208 | $12,847 | -$1,361 | -9.6% |
| Student loan balance | $10,446 | $10,874 | $428 | 4.1% |
| Personal loan balance | $6,446 | $4,971 | -$1,475 | -22.9% |
| Other balances | $2,339 | $2,064 | -$275 | -11.8% |
| Number of active accounts | 10.5 | 9.5 | -1.1 | -10.2% |
| Number of active credit cards | 5.7 | 4.9 | -0.8 | -14.1% |
| Credit utilization | 62.0% | 18.7% | -43.3% | -69.8% |
| On-time payment percentage | 93.8% | 97.9% | 4.0% | 4.3% |
Source: Analysis of an anonymized sample of 1,496 LendingTree users who increased their credit scores by at least 100 points between October 2022 and October 2023. Note: Differences and percentage changes were calculated using unrounded numbers.
Big credit score moves aren’t common, but they do happen
Good credit is about repeatedly doing the right things for years. In the same way it took time for your parents to warm up to giving you the car keys growing up, it can take a while to prove to lenders that you’re worthy of a loan with decent terms. Ultimately, that’s what credit is all about — helping lenders judge who will most likely repay a loan without incident.
Unfortunately, big credit score drops can happen quickly. A single 30-day late payment can slash as many as 50 points (or even more) off your credit score. Those points can be the difference between a very good and an excellent credit score or a poor one and a fair one — or anything in between. That can determine how good the terms are on the loan you get, or even if you can get it.
However, while scores can drop quickly, they don’t tend to move in the other direction as quickly. The people in our sample — many of whom saw their scores jump from fair to very good (skipping past good) or from good to excellent (skipping very good), as the below table shows — are the exception rather than the rule.
Beginning and ending credit score range among people who raised their credit scores by at least 100 points in a year
| Beginning and ending credit score range among people who raised their credit scores by at least 100 points in a year | ||||||
|---|---|---|---|---|---|---|
| Ending credit score range | ||||||
| Starting credit score range | Poor | Fair | Good | Very good | Excellent | Total |
| Poor | 224 | 538 | 180 | 12 | 1 | 955 |
| Fair | 0 | 0 | 130 | 150 | 21 | 301 |
| Good | 0 | 0 | 0 | 60 | 180 | 240 |
| Total | 224 | 538 | 310 | 222 | 202 | 1,496 |
Source: Analysis of an anonymized sample of 1,496 LendingTree users who increased their credit scores by at least 100 points between October 2022 and October 2023. Note: The credit score ranges are 300 to 579 (poor), 580 to 669 (fair), 670 to 739 (good), 740 to 799 (very good) and 800 to 850 (excellent).
That’s what made us interested in this report. We wanted to see what people did to make their credit scores spike so people could learn from them. While there are some things we couldn’t know — for example, if there was a mistake on someone’s credit report (like an incorrectly attributed late payment) that was holding down their score unjustly and they had it removed — what we could see was illuminating.
Takeaway No. 1: They dramatically reduced their overall debt
Nearly half of that $20,485 drop came from the average mortgage balance, which fell from $66,466 to $56,337. That decrease of $10,129 is impressive, and it clearly indicates that these consumers went above and beyond in their debt reduction efforts. After all, if you had a 30-year mortgage of $66,000 at a 7.00% APR and only made your required payments, you’d never pay down as much as $5,000 of your balance in a given year. That’s because so much of your monthly mortgage payment — especially in the early years of the mortgage — goes toward paying off interest and taxes and fees rather than the principal balance, so the principal balance shrinks very slowly.
(Note: $66,000 is an unusually low balance for a mortgage. Per Experian, the average mortgage balance in the U.S. in late 2022 was $236,443. For our sample, the average is likely low because it includes an undetermined number of people who don’t have any mortgage debt, as well as people whose mortgage debts are low because they’ve spent years paying them off.)
As a result of that debt paydown, the average total monthly payment for someone in our sample decreased by $340 (or 23.5%) in just a year.
These average reductions might be skewed by those in our sample who sold their previous houses and no longer own a home. However, the point about the importance of reducing your overall debt remains.
Takeaway No. 2: They dramatically reduced their credit card debt and their credit utilization
The average person in our sample lowered their credit card debt by $7,673. This means they slashed their card debt by 74.6%, going from $10,287 to just $2,614 — that’s a massive reduction. It can be accomplished in a few ways, including paying off all the debt but also by shifting that debt to a debt consolidation loan with a lower interest rate. Either way, the move can be a net positive for your credit.
Credit card paydowns among people who raised their credit scores by at least 100 points in a year
| Percentage of balance paid down | Percentage of cardholders who did it |
|---|---|
| Paid down their credit cards by 100% | 24.9% |
| Paid down their credit cards by 95% or more | 36.5% |
| Paid down their credit cards by 90% or more | 44.5% |
| Paid down their credit cards by 85% or more | 50.5% |
| Paid down their credit cards by 75% or more | 59.1% |
| Paid down their credit cards by 50% or more | 74.8% |
Source: Analysis of an anonymized sample of 1,223 LendingTree users who increased their credit scores by at least 100 points between October 2022 and October 2023 and had credit card debt.
It wasn’t just about reducing credit card debt, though. They also dramatically reduced their utilization rates — how big their revolving credit balances were in relation to their available credit. Credit utilization is the second-most important factor in credit-scoring formulas besides your payment history. The rule of thumb has long been that you need to keep your utilization below 30% (for example, a $3,000 balance on $10,000 in available credit) to protect your credit score, but the lower the utilization, the better. Those in this sample lowered their utilization from 62.0% to just 18.7%, a move that could potentially improve their score significantly.
Takeaway No. 3: They paid their bills on time more often
A lower credit utilization rate is a big deal, but a cleaner, consistent record of on-time payments is the biggest deal. Your payment history is the most important factor in credit-scoring formulas, and it only takes one mistake to damage your credit score. Here’s how FICO calculates scores:
How FICO Scores are calculated
| Factor | Weight |
|---|---|
| Payment history | 35% |
| Amounts owed | 30% |
| Length of credit history | 15% |
| New credit | 10% |
| Credit mix | 10% |
Source: myFICO.
FICO’s primary competition, VantageScore — which provides the scores you get via LendingTree — takes a similar approach. However, it weighs payment history more heavily than FICO does.
How VantageScores are calculated
| Factor | Weight |
|---|---|
| Payment history | 41% |
| Depth of credit | 20% |
| Credit utilization | 20% |
| Recent credit | 11% |
| Balances | 6% |
| Available credit | 2% |
Source: VantageScore. Note: Based on VantageScore 4.0.
Among the people in our sample, the percentage of on-time payments rose from 93.8% to 97.9%. That may not seem like much growth compared to other numbers in this report, but it’s significant. Ideally, that number would be 100.0% for everyone, but if it can’t be, the focus should be on being late less often. Just that 4 percentage point increase means a lot fewer late payments, and that’s a huge step.
Takeaway No. 4: They held fewer accounts
The average person in our sample held one fewer active loan account in October 2023 than in October 2022 — 9.5 versus 10.5. That no longer active account was likely a credit card, given that the average number of those held by someone in our sample fell from 5.7 to 4.9, almost one full account.
Account details among people who raised their credit scores by at least 100 points in a year
| Percentage who … | Number | Percentage |
|---|---|---|
| Went from zero to at least one loan account* | 66 | 4.4% |
| Added accounts | 517 | 34.6% |
| Decreased accounts | 722 | 48.3% |
| Kept the same number of accounts | 257 | 17.2% |
| Increased mortgage accounts | 38 | 2.5% |
| Decreased mortgage accounts | 82 | 5.5% |
| Opened first mortgage account | 24 | 1.6% |
| Increased credit cards | 400 | 26.7% |
| Decreased credit cards | 592 | 39.6% |
| Opened first credit card | 61 | 4.1% |
| Increased auto loan accounts | 154 | 10.3% |
| Decreased auto loan accounts | 203 | 13.6% |
| Opened first auto loan account | 105 | 7.0% |
| Increased personal loan accounts | 208 | 13.9% |
| Decreased personal loan accounts | 377 | 25.2% |
| Opened first personal loan account | 132 | 8.8% |
| Increased student loan accounts | 178 | 11.9% |
| Decreased student loan accounts | 59 | 3.9% |
| Opened first student loan account | 74 | 4.9% |
Source: Analysis of an anonymized sample of 1,496 LendingTree users who increased their credit scores by at least 100 points between October 2022 and October 2023. *: Mortgage, auto loan, personal loan or student loan account.
While the other takeaways were all slam dunks — it’s pretty much never a bad thing to reduce your debt, improve your utilization and pay on time more often — it’s not that simple when it comes to reducing the number of accounts you have. Paying off a loan and closing an account can be great because it may mean less overall debt and fewer bills to keep up with. On the other hand, it can reduce your credit mix, increase your utilization rate and shorten your average account age, all of which can damage your score.
Still, even if you have serious debt, adding rather than reducing the number of accounts you have can be a smart move when done wisely. (In fact, 34.6% of those in our sample increased the number of accounts they held.) For example, consolidating and refinancing debts with a 0% balance transfer credit card or a low-interest personal loan can help you pay down debts more quickly and reduce the number of bills you have to pay each month. Plus, adding a new credit card can improve your utilization rate, if you don’t go out and spend that newly available credit.
Given all that, it seems likely that the reduction in the number of accounts held was less of a driving factor in the rapid growth of these people’s credit scores than the previous three takeaways.
Temper your expectations and lather, rinse, repeat
Ultimately, people tend to overthink credit. Sure, there are nuances, little details and small things you can do to help your score improve — but it’s pretty simple at a basic level. It’s about doing these three things over and over again for years:
- Paying on time every single time
- Keeping balances as low as possible
- Not applying for too much credit too often
If you do those three things consistently, your credit will be fine. It’ll slowly improve, ensuring you can get most of the loans you want with decent terms.
This report suggests that if you can turbocharge how you do these things, you can see more dramatic improvement. In a year, those in this sample:
- Reduced their overall debt by 18.6%
- Reduced their mortgage balance by 15.2%
- Reduced their credit card debt by 74.6%
- Lowered their credit utilization by more than 40 percentage points
- Increased their on-time payment percentage by 4 percentage points
Those numbers aren’t normal — not even close. The average person would be right in celebrating doing one of those things over five years. To do all of them in one year is out of the realm of possibility for most Americans, given how small the average household’s financial margin for error is. However, this information can be useful as further confirmation of what it takes to improve your credit, even if it takes a whole lot longer for you than for the folks in this sample.
The key to it all, whether you’re looking for a big scoring boost or steady growth, is to get started. If you don’t take steps to make change, nothing will improve.
Some of those steps may include:
- Setting up autopay on your bills to make sure you don’t pay late
- Asking a card issuer for a higher credit limit to help your utilization rate
- Getting a 0% balance transfer credit card to reduce your monthly payments and free up money to put toward other debts
- Using a personal loan to consolidate and refinance high-interest debts
- Reassessing your budget to see if, through sacrifice or simple prioritization, you could find extra cash to put toward paying down debt
There are plenty more where those come from. The right steps for you will depend on your specific circumstances, but the best one is the one that starts you on the path toward better credit.
Methodology
Using an anonymized sample of 1,496 LendingTree users who increased their credit scores by at least 100 points between October 2022 and October 2023, researchers calculated high-level changes to their credit reports. We calculate average balances for mortgages, credit cards, auto loans, student loans, personal loans and other debt types.
We calculated the percentage of people who paid down a certain percentage of their credit card debt. We also analyzed the increase or decrease in loan types, as well as the number of people who opened a new loan for each type (mortgage, credit card, auto loan, student loan and personal loan).
The credit score ranges are 300 to 579 (poor), 580 to 669 (fair), 670 to 739 (good), 740 to 799 (very good) and 800 to 850 (excellent).