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How to Repair Your Credit in 12 Steps

Now that you understand what a credit score is and how it’s calculated, let’s get into the actionable steps you can take to improve it. Repairing your credit scores is not an overnight process, but you can improve them with dedication and the right strategies. Here are some guidelines on how to repair credit.

1. Review your credit report

The first step in repairing your credit is to get a copy of your credit report from all three major credit bureaus: EquifaxExperian, and TransUnion.

You can get one free repoty every 12 months directly from each credit bureau or by going to You can spread your requests over the year, getting one credit report every four months to help you monitor your credit.

Then, read over your credit reports for discrepancies and dispute any errors using the process below. Each credit reporting agency offers a dispute process. Follow their process carefully, as even a small mistake on your credit report can impact your credit score. Fixing errors can raise your credit score substantially.

2. Challenge inaccuracies in your credit report

One in three people find errors on their credit reports, which can significantly impact their credit scores.2 You can dispute and request the removal of any inaccurate information on your credit report.

File disputes with each bureau online or by mail, providing any required documentation. They must investigate your dispute within 30 days or remove the disputed items from your credit report.3 The dispute process can take time, so be patient but persistent. Then, monitor your credit, which you can do for free, to ensure no new negative entries appear on your credit reports. It also helps prevent identity theft, another way credit scores get ruined.

3. Repay your debts

Your payment history accounts for 35% of your FICO credit score, and it’s the factor lenders consider most in offering credit. Repaying outstanding credit card and loan debts reduces your overall utilization ratio, which makes up 30% of your FICO credit score. Prioritize paying down balances, especially on any maxed-out cards. Focus on paying off debts with high-interest rates first.

Even paying a portion of your debt can lower your utilization. Make a budget that helps you to free up money for repayments. You can use the debt avalanche or debt snowball method to tackle your debts systematically.

4. Allow time for negative entries to be removed

Negative entries like bankruptcies and late payments will eventually fall off your credit report, improving your score over time. The waiting period can be several years, but it’s worth it.4 Avoid trying to remove valid negative items prematurely. Focus on adding positive entries with sound financial habits, so you’re ready when negative entries expire. You can use free tools to monitor your progress.

5. Pay your bills on time

Always paying your bills in full and on time is the most critical factor in credit scoring. Setting up autopay for your bills can help you avoid late payments, which can severely impact your credit score. If you must pay the minimum, pay earlier than the due date. Consistency is crucial since one late payment can undo months of progress.

6. Keep credit utilization rate low

Keeping your credit card balances low compared to your total available credit limit helps maintain a good credit utilization ratio. Aim to keep balances under 30% of your overall credit limit. If possible, pay off cards in full each month. This shows lenders that you’re responsible with your credit and can manage debt well.

7. Maintain open credit accounts you’re not actively using

Keeping old credit cards open can help improve the length of your credit history, which makes up 15% of your credit score. Only charge something minor, like a low-cost monthly streaming subscription, on the card each month if you need consistent activity to keep it open. Then, pay the charge in full and on time every month. However, consider closing accounts with high annual fees that could negate the benefits.

8. Get a secured credit card

secured credit card can be a helpful tool for strengthening your credit. Responsibly using one can help rebuild your credit history.

The refundable deposit you provide lowers issuer risk to credit card issuers. Most financial institutions report the payment activity to the credit bureaus, which can help increase your score. Use these cards wisely, and your credit score may begin rising.

9. Get a credit builder loan

A credit builder loan can help you create a positive payment history that is reported to the credit bureaus. This, in turn, can improve your score. You repay money held in a bank account and receive the proceeds later. On-time credit builder loan payments demonstrate financial responsibility and earn lender trust.

10. Become an authorized user

If you can’t qualify for new credit right now, ask a friend or family member with good credit to add you as an authorized user of their credit card. Their positive history gets added to your credit file, helping improve your score.

Check that their card issuer reports authorized user activity to all three credit bureaus. To keep your friend or family member’s credit in good standing – and maintain their trust – avoid using their credit card unless you can pay on time.

11. Use nontraditional credit reporting

Services that report on-time rent and utility payments can add a positive payment history to your credit profile. These nontraditional credit reporting services are especially useful for helping rebuild credit. Ask landlords and utility companies to report your timely payments or use third-party services that do it for you.

12. Only obtain credit when it’s necessary

Each time you apply for new credit, the lender or credit card issuer makes a hard inquiry on your credit, which can lower your score by a few points. New accounts also lower your credit age, and too many inquiries can signal risk to lenders.

When working on credit score repair, be strategic about when and why you apply for credit. Only apply for new credit accounts when you genuinely need them since too many new applications can negatively impact your score. Space applications out and limit them.



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