Tips for Repairing Your Credit Score

Whenever you apply for any type of credit, your potential lender will want to first check your credit score.


Your credit score is a three-digit number that essentially tells lenders how responsible you are with your finances. Most credit scores fall between 300 and 850. Most lenders will consider a good credit score to be between 600 and 750. Anything over 800 is considered excellent. The better your credit score, the more benefits are available to you, such as larger loans and lower interest rates.

Building up a good credit score can take quite a bit of time. This is due in large part to the fact that reporting companies only update the information monthly. Therefore, even if you implement some strategies, you have to be prepared to wait at least a few weeks to see how it affects your score. However, there are a couple of tips you can follow to move the process along and get positive results.

Check Your Credit

The very first step to repairing your credit score is understanding why your credit score is dropping. To do this, you will need a copy of your credit report. Under the Fair Credit Reporting Act, you are eligible for a free copy of your credit report once per year. You can acquire a free credit report from one of the three main credit bureaus: Experian, TransUnion or Equifax.

You may even want to receive a credit report from multiple sources, as some agencies have slightly different data that may make the difference in how you repair your credit score. If your credit score is particularly low, then you may find it beneficial to use a service that will allow you to look at your score every month. Some of the services receiving the best reviews include:

  • Credit Karma: This service, also available as an app, offers free credit score reports from all of the major bureaus. The app works on both Android and iOS and alerts you if there are any changes to your score.
  • Credit Sesame: This is an app that gives you a free look at your score using the VantageScore system. It gives you a report card with letter grades in all of the important areas, such as credit history, credit usage and ratios. It also has a credit predictor that lets you know how much borrowing power you currently have.
  • MINT: This app is a credit monitoring app, as well as a money managing app, so it offers a bit more than the others. It does charge a subscription fee each month, but with the extras offered you might find it worth it.

Your credit report will contain a detailed listing of your credit history that will give you an accurate idea of what mistakes you have made and how they are impacting your credit. It is very important to understand these differences, as some repairs will have a much larger impact on your credit score than others. You should always prioritize the most obtainable repairs that will give your credit score the greatest boost.

When looking over your credit report, there are three main areas to consider. The first is whether your credit report contains any incorrect information. Unfortunately, some credit accounts are incorrectly marked, typically due to someone sharing your name. Other times, payments you have made to your creditors are not correctly listed on your report.

The next information you should look for is how much you currently owe in debt. If you have any active payment plans, check how much of your debt you have paid off. You should also check if any of your accounts have been sent to collections. Finally, look for any maxed-out credit accounts in your name. All of those will negatively affect your score, and all of them are fixable.

The Strategy:

  • Get a copy of your credit report and review.
  • Create a list of factors impacting your score.
  • Determine how much you currently owe in debt.

Disputing Incorrect Information

You may be tempted to dispute errors in your credit report online. Reporting errors online is typically the fastest option, but it does not leave a sufficient paper trail. In addition, you will rarely speak directly with a person. It may be more time consuming, but it helps to make the dispute through the mail or over the phone. Sending documents through the mail creates a paper trail, which can back up your claims that you tried to resolve the dispute. Settling a dispute over the phone allows you to speak directly with the credit bureau, which ensures your case is actually being handled. It also allows a credit expert the opportunity to explain things to you and clarify whether something is actually an error on your report.

The Strategy:

  • Make a list of items to be disputed.
  • Contact the credit bureau by phone AND by mail.
  • Follow up with them until it is resolved.

Paying Past Due Accounts

Payment history has the biggest impact on your overall credit score. If you have multiple past due accounts listed on your credit report, your credit score takes a significant hit. The first step to improving your credit score should always be settling your old debt. At the very least, you need to get your past dues listed as current. It is even better if you can pay off the debt entirely, but this is often not an option without borrowing even more money and incurring more debt.

If your account is not marked current within 180 days of missing payments, it will become marked as a charge-off. A charge-off means your credit card is no longer usable because you have missed so many payments. In addition, you will not be able to make your minimum monthly payments until your account is caught up on your payment plan. In addition, having a charge-off on your account will lower your credit score even more than being delinquent on your payments.

Unfortunately, even when you catch up with your payments, your charge-off will remain on your record. The listing will change to “charge-off settled.” Even when you pay off the debt entirely, it will remain as “charged-off paid.” Both of these will still hurt your credit score, but not as much as an open charge-off listing. You may be able to remove a charge-off early if you negotiate with your creditor. If you can, make payments larger than the minimum requirement once you have caught up. Tackle those that have the highest interest rates first.


The Strategy:

  • Make a list of accounts that are past due.
  • Bring accounts current and work with creditors.
  • Begin paying off the smaller ones first.
  • Avoid charge-offs if possible.
  • Pay more than the minimum, even if it is one dollar more.

Bringing High Account Balances Below Your Credit Limit

Your credit score helps to determine your maximum credit limit. However, your credit score is also impacted by how close your credit is to the total limit. For the best credit score, your total debt should be equal to 30 percent of your total available credit. If your total debt owed is much higher than 30 percent, you should focus on making payments to bring these totals down to 30 percent. You may want to start with the highest since the highest debt will take the longest to clear. However, if you start with the lowest, you will improve your credit score faster. Once all your debts are at 30 percent, work on bringing them below 10 percent to repair your credit score even faster.

The Strategy:

  • Determine what your total debt is for each account.
  • Determine how much available credit you still have.
  • If your total debt amount is higher than 30 percent of the available credit, pay it down.
  • Start with the account with the smallest balance first, as it will impact your score faster.

Build Positive Credit

After you have addressed your negative credit, the next step is to build positive credit. You can apply for a new credit card with a bank or company you have not previously defaulted on. Try to limit your applications, as too many credit inquiries in a short amount of time will hurt your credit score. You may have to settle for a secured credit card until your credit score has improved. Make sure to wait until you are financially ready before opening a new account, otherwise you may end up undoing any repairs you have already made to your credit score.

The Strategy:


  • Obtain a low limit, lower interest card.
  • Make payments on time and if possible, pay the entire balance each month.
  • Do not open another account if you have not paid off or paid down the others.

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