How to Rebuild CreditA step-by-step guide to repairing credit.

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If you want to rebuild credit, the first step is to breathe. Next, know that there is no such thing as fast credit repair because how long it will take to fix your credit depends on your specific situation. For instance, building credit takes a lot longer for someone with huge debts, bankruptcy, collection accounts and a terrible credit history than it does for someone who has just missed a payment or two.

So, if you’re wondering, “How long does it take to rebuild credit?” in the case of that first scenario it could take years and the second could take months. That said, once you know how to fix your credit, do yourself a favor and try your best to get it done. Once you do, you’ll be on your way to a healthy financial life.

How to Fix Your Credit in 5 Steps

The following five steps are your answer for how to improve your credit score and start rebuilding your financial future today.

See: 20 Things That Can Mess Up Your Credit Score

1. Take Care of Late Payments

So, you have some late payments on your credit report — that’s no big deal, right? Wrong. Your payment history is the most important factor in your credit score, so get those delinquent accounts paid up and make sure you continue to keep them in good standing.

2. Reduce Your Credit Utilization Ratio

Another important factor in your credit score is your credit card utilization, which translates into your balance-to-limit ratio. If that credit card debt, or ratio, is too high, it could hurt you. So pay off your credit card balances and try to pay the balance in full every month as this can also help in repairing credit.

3. Take Out a Credit Builder Loan

A credit builder is a small loan some credit unions and banks offer that’s designed to help you either establish new credit or repair your credit. Obviously, if you choose this option, you’ll know to make your loan payments on time every time, because that’s what will boost your credit score. But the catch is, to protect the lender, you don’t get access to the loan money until you’ve fully paid for it.

For example, Republic Bank offers a loan from $500 to $1,500 with 12-, 18- or 24-month terms. The bank puts the amount of money you borrow in a certificate of deposit, which earns you interest. You make your monthly loan payments in a timely manner, of course, and when you’ve paid off the loan you can either withdraw your funds or leave them invested in a CD. This credit builder program can help you improve your credit score in just 12 months, according to Republic Bank.

4. Get a Secured Credit Card

You can use credit cards to rebuild credit, too. Secured credit cards, for example — like credit rebuilding credit cards — allow you to put collateral money in a security account. You gain access to that money depending on your income and ability to pay that amount.

A secured credit card works just like a regular credit card in that you can use it to make purchases and use it in places that do not accept cash or debit cards. Beware, though: This is not a prepaid credit card. Your security deposit does not count toward payments, like it does with a prepaid card, but as collateral only. Keeping up your payments on this type of card can rebuild your credit, but if you default, the financial institution that issues it is entitled to keep your deposit.

5. Don’t Apply for New Credit Too Often

Your credit report shows any applications for new credit as an inquiry, which indicates that you’re taking on new debt. Instead of exploring new credit avenues, use your existing credit to show your ability to manage it responsibly. Applying for new lines of credit needlessly, whether it be another credit card or a loan, will cause your credit score to go down.

You simply can’t fix credit overnight. It probably took you a while to develop bad credit, so figure on it taking you a while to fix it. Repairing your credit takes time and energy, but considering how important good credit is in our society, if you do take the steps to improve your credit score, it will be time and energy well spent.