How to Fix Your Credit in 5 Steps

Whether you realize it or not, your credit score can have a significant impact on your life. It can determine whether you can buy a home, get an auto loan, secure an apartment, and, in some cases, land a job. If your credit is anything less than stellar, you may need to ask yourself, “Is it time to fix my credit?” In this post, we’ll cover five of the best ways to fix your credit:

  1. Get a copies of your credit report
  2. Address any errors on your credit reports
  3. Protect and nurture your credit history
  4. Keep your credit utilization ratio low
  5. Protect your older credit accounts

The good news is that there are things you can do to fix your credit, the bad news is that it won’t happen overnight. But if you keep working at it, you can repair your credit score and improve your financial options (like applying for a new apartment, car loan, credit card) and probably save yourself on interest in the long-term.

1. Get a Copy of Your Credit Report

The first step to repairing your credit score is to request a copy of your credit report. After all, it can be impossible to repair your credit if you don’t know what’s wrong with it.

Fortunately, the three major credit reporting agencies, Experian, Equifax, and TransUnion, allow you to get a free copy of your credit report.

While the Fair Credit Reporting Act entitles you to one free copy of your credit report each year, these three agencies agreed to offer free weekly reports during the pandemic and have continued to offer it at the time of this article.

While requesting your credit reports is a great first step, there are some things you won’t find in them. Everything may not be included in these reports. For example, credit reports typically don’t provide your credit score. Rather, these reports only provide the details companies, such as FICO® and VantageScore®, use to calculate your score.  

That’s where’s ExtraCredit® comes in. Its Track It feature tracks 28 FICO scores, provides credit reports from the three major credit reporting bureaus, and offers continuous credit monitoring. These tools can help you track the status of your credit as you work to repair it.

2. Fix Errors on Your Credit Report

When you receive your credit report, the first thing you want to do is to review it and make sure all the information is correct.

What Information Does a Credit Report Include?

Your credit report begins with your basic details—your full name, your birth date, your current address, past addresses, and so forth. Credit reports should no longer include details about liens and judgments, but bankruptcies do still appear. However, bankruptcies should fall off your credit report after seven or 10 years, depending on the type of bankruptcy.

Next, you’ll see an informational breakdown for each line of credit you have. Account age, number of payments made, missed payments, late payments, and other facts are all included. Payment history, credit utilization, credit type, account age, and credit inquiries all factor into your credit score.

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    How to Fix Errors on Your Credit Report

    If after reviewing your credit report you notice any errors, it’s important to take steps to fix these issues. You have two options:

    Many people take a DIY approach to minor errors. If you’ve been the victim of identity theft, on the other hand, you’ll want to consider a professional helping hand. In either case, document the error thoroughly and file a separate dispute with each applicable credit bureau.

    Credit bureaus must respond to disputes within 30-45 days and correct errors immediately, if they are found. So, if you report a genuine error, you could potentially see your score change for the better within a month or two, depending on other factors in your credit report.

    3. Start Rebuilding Your Credit History

    Once you review your credit report and fix any errors, you can start on the path to rebuilding your credit score.

    Your payment history is one of the most important factors in your credit report. It accounts for 35% of your overall FICO credit score. If you currently have accurate late payments on your credit report, there’s not much you can do to remove them. Rather, these late payments will typically remain on your credit report for up to seven years.

    What you can do is start making on-time payments. Start by setting a budget that accounts for all your bills. See if there are any budgetary areas you can cut back on. For example, can you cancel one or more online subscriptions or reduce your dining-out costs? Paying all your bills, including credit card bills, loans, and utilities, on time can start the process of repairing your credit.

    Another factor that many people overlook is credit mix. While it accounts for only 10% of your FICO credit score, it’s still important. Having the right credit mix lets lenders know you can handle many types of credit accounts responsibly.

    Take a look at your credit report and identify the various types of credit accounts you currently have. Ideally, you should try to balance installment accounts, such as car loans and mortgages, with revolving credit accounts, including credit cards and lines of credit. 

    Be careful not to apply for new accounts too often. Every time you apply for credit, it could result in a hard inquiry on your credit report. Too many hard inquiries could negatively impact your credit score—in fact, credit inquiries represent up to 10% of your FICO score.

    4. Maintain a Low Credit Utilization Ratio

    Your credit utilization ratio is another important factor impacting your credit score. It accounts for up to 30% of your overall FICO score. This value represents the amount of debt you currently owe in comparison to the total amount you can borrow.  

    It’s recommended that you never allow your credit utilization ratio to go over 30%. In fact, it’s best to keep this ratio as low as possible. For example, let’s say your available credit on all your revolving accounts, such as credit cards, is $5,000. It’s best for your credit score if you don’t spend more than $1,500 of this credit limit.

    When you keep your credit utilization below 30% of your total available credit, lenders see that you’re a responsible consumer.

    5. Review the Age of Your Credit Accounts

    As you start rebuilding your credit, you may be tempted to close some of your accounts. While closing a credit card account can eliminate the temptation to spend beyond your limit, it can also impact your credit score. Up to 15% of your overall FICO credit score depends on the average age of your credit history.

    If possible, try not to close your oldest credit cards or other revolving credit accounts. You can use these cards sparingly, but don’t close them.

    If you don’t have a credit card yet due to your bad, or lack of, credit, consider applying for a secured credit card. These cards may be easier to get but often require you to put down a security deposit. Obtaining this type of card and making regular payments may help improve your credit.

    If your credit score is less than stellar or not high enough to obtain the loan or credit you want, don’t wait another day wondering how to fix your credit. Instead, take action.

    Start by taking the above steps to repair your credit. While your score won’t go up overnight, you may be able to see improvements in just a few months. You can take the first step of checking your credit report for free at now.

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