How to Repair Your Credit in 6 Easy Steps

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If you’re wondering how to fix your credit fast and boost your score, the good news is that a few smart moves can make a real difference quickly. While there’s no magic button for instant results, paying down credit card balances, disputing errors on your credit report, and making on-time payments going forward can give your score a noticeable lift in just a few weeks. It’s all about showing lenders you’re managing your credit responsibly–starting now.

Step 1: Dispute Errors on Your Credit Report

An investigation by Consumer Reports and Work Money found that 44% of individuals who checked their credit report found a mistake. It is crucial that you check your credit report yearly (at least) and dispute errors on your credit report. 

Common credit report mistakes to look for

Here are the common errors you need to watch out for in your credit report:

• Wrong name, address, or Social Security number
• Duplicate accounts
• Accounts that are not yours
• Payments that are marked late but were on time
• Outdated negative items
• Incorrect balances or credit limits 
• Fraudulent accounts or identity theft

How to file a dispute with credit bureaus

Once you get your credit report from AnnualCreditReport.com and identify a mistake, you can dispute it with the credit bureaus online or via mail. Here are the links to submit a dispute with the respective credit bureaus: Equifax, Experian and TransUnion. 

What to expect during the dispute process

After you file your dispute, you should expect the investigation to take at least 30 days. The bureaus will contact the lender to determine if the information is correct. 

You will receive your results via mail or online (depending on how you submitted the dispute). If your disputed information is found to be correct, your report will be updated. If the credit bureau doesn’t find a mistake, you can provide a consumer statement to explain your side. 

Step 2: Pay Bills on Time, Every Time

The single most important credit factor is your payment history. It accounts for 35% of your credit score. The following pie chart shows what factors affect your credit score. 

Tips for setting up automatic payments or reminders

You don’t have to keep up with payments the hard way. There are things you can do to make it easier on yourself: 

• Use your bank or lender’s auto-pay feature. Log in to your bank’s website and enable autopay for recurring payments. 
• Choose the right account and payment date. Align your payment dates with the date of your paycheck so you don’t overdraw your account. 
• Pay the entire balance. If you can, pay the full balance on your credit cards. If you can’t, at least pay the minimum to preserve your credit score. 

Step 3: Reduce Credit Card Balances

Credit card utilization is the amount you owe compared to your credit limit. To bolster your credit score, you want to keep your credit utilization score below 30%. The credit utilization factor contributes to 30% of your credit score, so you want to monitor your credit limit and the amount you owe on a specific card regularly. 

Strategies for paying down debt 

Ideally, you want a specific strategy to pay down your debt instead of making payments without a plan. You can adopt the snowball method. With this approach, you make payments on the smallest debts first. It builds momentum and is a good psychological win when trying to trim debt. 

Alternatively, you could try the avalanche method. This method advocates paying the balance on the debit with the higher interest rate first. It saves money in the long run because you’re not paying off accrued interest plus principal. 

Step 4: Avoid New Debt and Hard Inquiries

New credit inquiries can have an impact on your credit score. These inquiries lower your score by five to 10 points. Too many applications at the same time can signal to a lender that you are a credit risk. 

Knowing when it truly makes sense to apply for new credit can help protect your score. It’s generally a smart move if you’re preparing for a major purchase, like a mortgage, or if your credit is in great shape and you haven’t applied for anything recently. It’s also a good time to apply when you’re not planning to take out a new mortgage anytime soon, so a small dip from a credit inquiry won’t impact any upcoming loan approvals.

You should wait to apply for new credit when your credit score is recovering or if you’re planning to apply for a major loan soon. It is also a good idea to wait if you applied for credit in the last few months. 

Step 5: Negotiate With Creditors

Creditors want you to pay off your debt and are willing to work with you. Here’s the catch — you have to ask for goodwill adjustments. You can call the creditor and explain your situation. If you’re a customer with multiple accounts or have a long-standing good history, the creditor may be willing to remove the negative mark on your payment history. 

Setting up payment plans for past-due accounts

You can call the creditor for a hardship payment plan or arrangement. You may be able to lower your interest rate, freeze fees or split the balance into smaller payments. Get any agreement in writing before resuming payments according to the new payment terms. 

Step 6: Consider a Secured Credit Card  

A secured credit card can help you gain positive momentum in rebuilding your credit. You can make a cash deposit of $200 to $500, which becomes your credit limit. Pay on time and keep your balances low. This activity is reported to the credit bureau. 

Another credit-building option is an authorized user account. You can ask a family member to add you to their credit card account. Their credit card history can benefit you if they pay consistently on time. 

How Long Does It Take to Repair Credit?

It takes one to three months to make minor improvements to your credit report. A significant improvement on your credit score may take six to 12 months or even longer. The improvement in your credit score depends on the situation.

Here’s how fast different negative marks fall off your credit report: 

• Late Payments: Up to seven years
• Collections:  Typically seven years
• Hard Inquiries: Two years, but the impact lessens after a few months
• Bankruptcy:  Seven to 10 years, depending on the chapter

Should You Use a Credit Repair Service?

Whether you decide to use a credit repair service is an individual decision. Credit repair services are limited. They can offer guidance, communicate with the credit bureaus, and dispute errors on your credit report. They cannot remove negative, accurate information on your credit report. They also cannot guarantee an increase in your credit score. 

If you’re able to dispute errors with the credit bureaus, make on-time payments, pay down your debt, and regularly monitor your credit, you can take a DIY approach to credit repair and see meaningful results — no outside help required.

How to avoid credit repair scams

When you contact a company, you may be exposed to credit repair scams. Looking for services compliant with the Credit Repair Organizations Act (CROA) is a good idea. Also, be aware of companies that demand payment up front. It is a scam if they promise to erase bad debt or offer a new identity. 

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