How to fix your credit

Take these 7 steps to fix your credit score and regain financial independence

Profile picture of Kate Williams, Ph.D.
by Kate Williams, Ph.D. ConsumerAffairs Research Team
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If your credit score is lower than you want it to be, don’t panic. Your credit score is always changing because it’s based on your financial habits. What you see on your credit report is a snapshot in time, and it can change for better or for worse every month. There are several things you can do on your own to improve your credit score, though in many instances seeking help from a credit repair company is the fastest way to fix your credit score.

7 steps to fix your credit

  1. Check your credit score for errors: The credit reporting bureaus don’t have a credit file for every individual in this country. Instead, your credit pull is based on an algorithm that makes sure most of your information matches what’s on the report. This means it’s really easy for someone else’s bad credit history to impact your credit score, without any ill intention.

    Errors on your credit report, like unpaid accounts, judgments, collections, etc., can be detrimental to your credit score. Check your credit score at least once a year to make sure it’s accurate.
  2. Dispute and fix errors: You can dispute errors by contacting the three credit bureaus yourself either over the phone, online or through the mail.

    If you have evidence proving that your report is inaccurate, such as a receipt for a bill you paid that is marked unpaid on your credit report, your dispute should resolve relatively easily. For more complicated disputes, especially ones that suggest you’ve been the victim of identity theft like the wrong name on your report, consider contacting a credit repair company to help you.
  3. Start paying bills on time: Paying bills on time, even just the minimum amount, is the single most important factor that counts on your credit score. Get organized by setting up automatic payments for recurring bills so you never make a late payment again.
  4. Increase your credit limits: Your credit utilization ratio is how much credit you’ve taken out compared with how much credit you have available. Call your credit card companies to see if you can increase your credit limits to increase your credit utilization ratio.
  5. Pay down debt: Use one of the common debt payment strategies to start paying off credit card debt. Having less debt means you have a higher credit utilization ratio. It also demonstrates to creditors that you are capable of paying back your debt.
  6. Stop taking on new debt: Don’t take out any new debts, including personal loans, auto loans, mortgages or credit cards, while you’re working on fixing your credit. Creditors pull your report every time you take out a loan or apply for a credit card, which lowers your credit score.
  7. Wait for things to drop off: One good thing about your credit report is that it isn’t permanent. Negative items, like judgments, bankruptcies, late payments and collections, fall off after a period of time, usually 7–10 years. Their impact diminishes every month. Develop good credit habits now, like making on-time bill payments and paying down debt, so your credit score will be less and less impacted by the negative things on it over time.
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How long does it take to improve a credit score?

Negative marks like foreclosures and judgments take 7–10 years to drop off your credit report. The good news is that they have a lesser impact as time passes. Your newest credit habits have the biggest impact on your score, so as long as you are working on fixing your credit, you’ll start to see improvements before your negative marks fall off. Credit repair companies can help you see results in as little as 30–60 days, depending on why you have a bad credit score.

Type of negative markYears until it drops off your credit report
Late payments7 years from late payment date
Foreclosures7 years
Accounts in collections7 years +180 days from original debt’s delinquency date
Short sales7 years
Repossessions7 years
Chapter 13 bankruptcy7 years from filing date
Chapter 10 bankruptcy10 years from filing date
Judgments7 years+
Tax liens7 years after payment
Charge-offs7 years from date account was charged off
happy couple paying off credit

Bottom line

There’s no question having a low credit score can negatively impact your life, but the good news is there are plenty of things you can do to raise it. You aren’t doomed to be a subprime borrower forever just because you currently have a score in the 500s. Start by getting a free copy of your credit report from one of the major reporting bureaus, and figure out the main causes for your low score.

From there, take action, whether by paying your bills on time, increasing your credit limit, notifying the reporting bureau of mistakes on your credit report or seeking help from a credit repair specialist. You’ll slowly but surely find your credit score climbing, which will help you when you need to make major purchases and apply for credit down the road.

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Profile picture of Kate Williams, Ph.D.
by Kate Williams, Ph.D. ConsumerAffairs Research Team

As a member of the ConsumerAffairs Research Team, Kate Williams, Ph.D. believes everyone deserves easy access to accurate and comprehensive information on products and businesses before they make a purchase. She spends countless hours researching companies and industries before writing buyers guides to make sure consumers have all the information they need to make smart, informed buying decisions.