8 Steps to Help You Repair Your Credit Score

Improving your credit can take time, but it’s well worth the effort. Good credit can help you qualify for new credit cards or loans and lead to lower rates and fees on your offers.

If you have a low credit score today, the fastest way to repair your credit may be to address what’s hurting your credit and take steps to add new, positive information to your credit reports. Here are eight things you can do to get started.

1. Review Your Credit Reports for Errors

Your credit reports are the basis for your credit scores, so start by reviewing your credit reports from each of the credit bureaus — Equifax, Experian and TransUnion.

Look for accounts or negative marks that might be hurting your credit scores, such as collection accounts and late payments. You can also look for errors that could be hurting your credit.¹

For example, you might find a collection account that you paid off but still shows a balance, or late payments on an account when you paid the bill on time. Additionally, check for accounts that you didn’t open, as those may be the result of fraud and could be hurting your credit.²

Many credit reports don’t have errors or fraudulent accounts. But if you spot any, you can file disputes with the companies that reported the erroneous information to the bureaus, or with each of the bureaus directly. The company will then investigate and verify, change or delete the information — your credit scores may increase if they change or delete it.³

2. Address Negative Items in Your Credit History

Try to improve on some of the negative items that you identified in your credit reports. For example, you could bring past due accounts current and either settle or pay off collection accounts.⁴

These types of negative items can stay on your credit report for up to seven years, even if the account is paid off or in good standing. However, they may have less of a negative impact on your scores if they’re no longer outstanding, and the impact of any negative mark decreases over time.⁴

3. Open New Credit Accounts

Having open and active credit accounts can be important for adding positive information to your credit reports.

Getting approved for a loan or credit card can be difficult if you have poor credit. But there are some options that could be helpful when you’re repairing your credit:⁵

• Secured credit cards. A secured credit card works almost like a traditional, unsecured card. However, it’s easier to get approved because you need to send the card issuer a refundable security deposit when you open your account. This amount generally determines your card’s credit limit, and the issuer can keep the deposit if you stop paying your credit card bill.

• Credit-builder loans. A credit-builder loan is a type of installment loan. When you get approved, the lender puts the loan’s proceeds into a locked account. It reports your monthly payments to the credit bureaus, which can help your credit scores, and unlocks the account once you pay off the loan. 

• Authorized user accounts. If you have a family member or friend with good credit, you could also ask them to add you as an authorized user on one of their credit cards. Some credit card issuers report the credit card account’s history to the credit bureaus for both the primary cardholder and authorized user, and the new account might help your scores.

4. Add Alternative Data to Your Credit Reports

Some types of bills generally don’t get reported to the credit bureaus and won’t affect your credit scores, such as rent, utility and phone payments. However, some free and paid services let you connect your accounts and then report your payments to the credit bureaus. Getting credit for these bills might improve your credit scores without requiring you to open a new account or take on more debt.⁵

5. Pay Your Bills on Time

Making at least your minimum payments on time is one of the most important things you can do for your credit. Even with a secured account, a late payment could hurt your credit scores. Additionally, accounts that typically don’t get reported to the credit bureaus, such as utility accounts, can still harm your credit if you fall far behind and the account is sent to collections.¹

Setting up reminders or autopay can help you avoid missed payments. If you do fall behind, quickly bringing the account current can mitigate the impact. While creditors can charge you a late payment fee once you’re past due, they can’t report your payment as late to the credit bureaus until it’s at least 30 days overdue.⁴

6. Pay Down Credit Card Balances

Your credit utilization ratio can be an important factor in your credit scores. It’s also one of the few things that you may be able to quickly change to improve your credit.

Your utilization ratio depends on the balances and credit limits on your revolving credit accounts, such as credit cards. There’s no specific point when utilization goes from bad to good, but using a smaller portion of your credit limit is best for your credit scores.⁴

Most creditors report your account’s info to the credit bureaus at the end of each billing cycle, which is often around three weeks before your bill’s due date. So, even if you pay your balance in full each month, you may need to pay down your balance early to have a low utilization rate.

7. Keep Existing Credit Cards Open

You might want to close credit cards if they have an annual fee or if you tend to overspend. Otherwise, keeping credit cards open might help lower your credit utilization rate because the account’s credit limit will contribute to your overall available credit.⁶

Some people incorrectly think that closing a credit card will also hurt their credit by lowering the average age of their credit accounts. Although the account will eventually drop off your credit report, closed accounts can still affect your credit scores in many ways, including age-related scoring factors.⁶

8. Limit How Often You Apply for Credit

Although you’ll want to have open and active credit accounts, each credit application could lead to a hard credit inquiry. Hard inquiries are records of when creditors check your credit report before making a lending decision, and new hard inquiries might hurt your credit scores a little. Repeatedly applying for credit could hurt your credit scores even if you don’t get approved.⁵

You can limit the potential downside by sparingly applying for credit. You can also try to get prequalified before applying. Although a prequalification isn’t a guarantee, it can help you find out if you’re likely to get approved for a credit card or loan without hurting your credit scores.

Monitor Your Credit Scores

Repairing your credit might be a long process, and you can track your credit scores to see how you’re progressing. If you have a credit card from Synchrony Bank, you can get your VantageScore credit score for free with monthly updates. You can also use the online CareCredit credit card prequalification form to find out if you prequalify for the card without affecting your credit scores.

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Your CareCredit credit card can be used in so many ways within the CareCredit network including vision, dentistry, cosmetic, pet care, hearing, health systems, dermatology, pharmacy purchases and spa treatments. How will you invest in your health and wellness next?

Author Bio

Louis DeNicola is a freelance writer who specializes in consumer credit, finances and fraud. He has several credit-related certifications and works with many lenders, publishers, credit bureaus, Fortune 500s and fintech startups.