Key takeaways

  • Having a high credit score can help you gain access to better financial products with lower interest and better rewards.
  • If your score is low, there are several steps you can take to improve it, from building a stronger on-time payment history to seeking out professional credit counseling.
  • Though it may take time, fixing your credit is worth the effort long term.

Your credit score is one of the most important aspects of your financial health, but it’s also one of the most fragile. Building a great credit score can take years, but damaging it seems like it can happen overnight.

Thankfully, with the right credit repair tactics, you can reclaim this pillar of your financial strength. Knowing how to repair your credit can get you back on track and put the days of less-than-great credit behind you. Here are five steps to repair credit to get you started:

Check your credit score and credit reports

The first step in the credit score repair process is to understand where you’re at, where you need to be and what goes into your credit score.

Start by pulling a copy of your credit report. One of the most popular free options is, which allows you to pull one free report annually from each of the three reporting bureaus. Through the end of 2023, you can request free reports on a weekly basis, due to the impact of the COVID-19 pandemic.

Note, however, that the free credit reports you can pull from this site will not contain your credit scores. You may be able to access your score for free through your credit cards or as a perk with other subscriptions, or you may need to pay to see where your score stands.

Review your report and dispute any errors

The next step to repair your credit is to review your reports for any errors or discrepancies. According to a Consumer Reports investigation, 34 percent of Americans found at least one error on their credit report. If you have an error in your credit report, your credit score may be unfairly low.

If you find a discrepancy, file a dispute with the reporting bureau immediately.

What happens after a dispute?

According to Experian, most disputes are completed within 10 to 14 business days after they’re reported, but often much more quickly. The Fair Credit Reporting Act (FCRA) requires disputes to be addressed in no longer than 30 days.

Once the discrepancy is corrected, you may see changes to your score almost immediately. Even though the bureaus are required to handle discrepancies, you should still follow up and double-check your report to make sure things are corrected appropriately.

Follow a budget and establish positive financial habits

Your credit score provides a snapshot of your financial health. And, if you consistently follow a budget and practice healthy financial habits, your credit score should improve, reflecting your positive behavior.

Perhaps the best habit practiced by those with high credit scores is to pay your accounts on time. That’s because 35 percent of your credit score stems from your payment history, and even a single missed payment can remain on your report for seven years. Consider setting up auto-payments on all your accounts to ensure you never miss a payment.

Another positive step you can take is to follow a budget. If you have any existing debt, make sure your budget includes a payment plan for paying off your balances, such as the debt snowball method or the debt avalanche method. The debt snowball strategy prioritizes paying off your smallest balances first to create small wins that build momentum. By contrast, the debt avalanche method emphasizes paying your balances with the highest interest first to save money on interest.

Keeping your credit utilization ratio low is another common practice among high credit score achievers. Your credit utilization — the amount of available credit you use — makes up 30 percent of your credit score. A rule of thumb is to pay down any revolving debt and strive for a credit utilization percentage below 30 percent — the lower, the better — to indicate to lenders that you handle debt responsibly.

Take consistent action to build credit

Improving your credit score takes patience. Progress from small steps like the ones mentioned above will add up over time, so keep in mind that the strategic decisions you’re making will yield positive results soon enough.

One good decision is to avoid closing any credit accounts you pay off. For one, closing an account lowers your available credit, which could raise your credit utilization ratio if you have outstanding balances on other accounts. Also, an account closure could reduce the overall average age of your credit history, a factor that comprises 15 percent of your credit score (although accounts closed in good standing will stay on your report for 10 years). Generally, the older your average credit age, the better you look to lenders.

Of course, there are a couple of caveats. If an account has an annual fee and you don’t use it anymore, it may make financial sense to close the account, but consider a product change before you do. And, if leaving the account open tempts you to charge more than your budget allows for, closing it may be in your best interest.

Another smart move to build or improve your credit is to open a new secured credit card backed by a cash deposit. You’ll pay the deposit up front, and the amount you pay usually becomes your credit limit. You can use your secured card just like any other credit card, and you can build your credit by consistently making on-time payments. Secured credit cards can be advantageous to individuals with bad credit or a thin credit file.

Seek out credit counseling to discuss your options

If improving your credit seems overwhelming, consider getting help from a reputable credit counseling agency. Many agencies are nonprofit and may provide a free consultation with valuable advice tailored to your unique financial circumstances.

A good place to look for affordable credit assistance is the National Foundation for Credit Counseling (NFCC), a nonprofit network of financial counselors. You can also refer to the Department of Justice to find approved credit counseling agencies near you.

In addition to helping you create a budget and manage your finances, credit counselors can help you organize a debt management plan (DMP). A DMP usually requires you to make a single payment to the credit counseling agency every month or pay period. The credit counseling organization then makes payments to each of your creditors. Typically, the counselors do not negotiate with creditors to reduce the amount you owe (which could harm your credit), but instead, they may look to lower your monthly payment by asking your creditors to extend your repayment term, lower interest rates and waive fees.

Should you use a credit repair company?

Legitimate credit repair companies can help you remove credit-damaging mistakes from your credit report. However, there’s nothing a credit repair company can legitimately do for you that you can’t do on your own. Why pay someone you don’t know to repair your credit when you can do it yourself for free?

Remember, no company can remove negative information which is accurately reported on your credit report. Only incorrectly reported information can be removed from your credit report, and that’s something you can do on your own.

If you’re overwhelmed by the credit repair process or don’t have the time to do it yourself, hiring a reputable credit repair service may be worth considering. Keep in mind, reputable agencies do exist, but many credit repair companies are scams. Look out for red flags of illegal practices, including asking for money upfront before working on your behalf or failing to disclose your legal rights when they explain what they can do for you.

The bottom line

While building your credit back up can seem like a daunting task, there is light at the end of the tunnel. By continuously implementing responsible financial practices, you can start to rebuild your score. You may see some results quickly, but remember that fixing credit scores may take months or years depending on where you’re starting from. Remember, though, to focus on good habits from here on out to protect the gains you make so you don’t ever have to look into how to repair your credit again.