How to Rebuild Your Credit

Quick Answer

Regardless of the reason your credit score has suffered, you can rebuild your credit by addressing issues in your credit reports and developing good credit habits. Rebuilding credit isn’t an immediate process, but careful, disciplined progress over time will help.

A man checks his phone with a credit score diagram hovering above it.

If you've made financial missteps in the past, your credit score might not be as high as you'd like. While rebuilding your credit history won't happen overnight, you can take action to rebuild a more positive credit history starting today and improve your credit going forward.

Here are some concrete steps you can take to get your credit score back on the right track.

8 Steps to Rebuild Your Credit

There's no silver bullet for rebuilding a less-than-stellar credit profile. But regardless of the reasons for your current situation, here are some tried-and-true guidelines you can follow to get your credit score back where you want it to be.

1. Review Your Credit Reports

Every situation is different, so the best way to know how to improve your credit is to check your credit reports. These documents contain a history of your dealings with creditors, so reading them can help you determine which areas to address.

For example, if you have high credit card balances, you could focus on paying them down. Or, if you have an unpaid collection account, paying off that debt could be a top priority. You can also check your credit reports for inaccurate information that could be negatively affecting your credit score. If you find something, you have the right to file a dispute with the credit bureaus.

You can check your Experian credit report for free anytime, and you can also get your TransUnion and Equifax credit reports for free through

2. Pay Bills on Time

The most influential factor in your FICO® Score is your payment history, so paying your bills on time is crucial. If you're behind on payments, make it a goal to get caught up as quickly as possible.

Then, consider creating a budget and cutting back on your discretionary spending to help ensure that you can afford to pay your bills on time going forward.

3. Lower Your Credit Utilization Ratio

Your credit utilization ratio is the percentage of your available credit on revolving debt—generally credit cards—that you're using at a given time. For example, if you have a $10,000 limit on a card and a $6,000 balance, your utilization rate is 60%.

While some credit experts recommend keeping your utilization rate below 30%, there's no magic threshold. Among consumers with excellent credit, utilization rates are generally below 10%.

Look for opportunities to add more to your monthly credit card payments, and in the meantime, consider using other payment methods, such as cash or a debit card, to avoid adding more debt.

4. Get Help With Debt

If you're having trouble keeping up with your debt, consider consulting with a credit counselor who can evaluate your situation and provide you with free guidance on how to tackle your debt.

A credit counseling agency may also recommend a debt management plan, which can help make your unsecured debt, particularly credit cards, more affordable. For a modest monthly fee, the agency can negotiate lower interest rates and payments with your creditors and help facilitate payments over a term of three to five years.

5. Become an Authorized User

If you have a family member or friend who has good credit, consider asking them to add you as an authorized user on one of their credit card accounts. Once your authorized-user status is reported to the credit bureaus, the entire history of the account will be added to your credit reports.

You can also get a card that's linked to the account and make purchases of your own. Just be sure to make arrangements with the primary cardholder to pay off your charges.

That said, avoid buying tradelines from strangers. While the practice isn't illegal, it's considered to be deceptive by lenders and could put you in danger of committing credit fraud.

6. Get a Cosigner

Making on-time loan payments can help you rebuild credit, but if your score is low, you may have trouble getting approved in the first place. If you do get approved, you may be faced with high interest rates and fees.

One way to improve your odds of approval and enjoy more affordable terms is to apply with a creditworthy cosigner. The lender will consider both your and their credit history and income. Keep in mind, though, that when a loved one cosigns a loan application, they're agreeing to pay off the loan if you can't. The debt will also show up on their credit reports, which could impact their ability to obtain credit.

As a result, it's important to ensure that your cosigner understands their responsibility and how the decision can affect them before you proceed.

7. Only Apply for Credit You Need

Making timely payments on multiple credit accounts can help you rebuild credit more effectively. But while it may be tempting to apply for several credit cards and loans, you could accidentally overextend yourself and make matters worse.

Additionally, having multiple credit inquiries on your credit reports in a short period could negatively impact your credit score and make it difficult to get credit when you need it.

As such, it's a good idea to avoid applying for a credit card or loan without a valid reason.

8. Consider a Secured Card

A secured credit card functions similarly to a traditional unsecured card, the only difference being that you need to put up a security deposit—usually equal to your desired credit limit—to get approved.

In many cases, credit card companies hold on to your deposit until you close the account. However, some major card issuers will refund your deposit and convert your account to an unsecured card if you exhibit good credit habits over a period of several months.

As you compare secured credit cards, look for options that charge no annual fee and offer rewards or other benefits that add value to your efforts to rebuild credit.

Frequently Asked Questions

  • Lenders typically offer the best products and terms to borrowers with good credit or better. Here's a quick look at the different credit score ranges for FICO® Scores:

    • Exceptional: 800 to 850
    • Very good: 740 to 799
    • Good: 670 to 739
    • Fair: 580 to 669
    • Poor: 300 to 579
  • FICO considers five main factors when calculating your credit score. The factors can vary in importance depending on a person's individual circumstances, but the percentages FICO provides can still give you an idea of which elements are more important as you work to rebuild credit:

    • Payment history (35%): This is your ability to pay your debts on time. Late payments typically get reported 30 days after your due date, and the longer an account goes unpaid, the more damage it'll do to your credit.
    • Amounts owed (30%): This includes the total amount you owe on all your accounts, how many accounts have balances and your credit utilization rate on your revolving accounts.
    • Length of credit history (15%): FICO considers the age of your oldest credit account and newest credit account, as well as the average age of your accounts.
    • Credit mix (10%): While it isn't necessary to have different types of credit, it can help. For example, people who manage credit cards, a mortgage loan and an auto loan well are more likely to have good credit than people who only use credit cards.
    • New credit (10%): Each time you apply for credit, the lender will run a hard inquiry on one or more of your credit reports. While one additional inquiry typically won't impact your credit score much, multiple inquiries in a short period can have a compounding effect unless it's due to rate shopping for certain loans. Aside from inquiries, opening several credit accounts in a short time period can indicate greater risk and hurt your credit scores.
  • Because every situation is different, there's no set timeline for rebuilding credit. In the end, it'll depend on your particular credit history and the steps you take to improve it.

    For example, if you have a bankruptcy on your credit report—which can remain for up to 10 years—it'll likely take longer for you to rebuild credit compared to someone who just has high credit card balances, which only remain on your reports until you pay them down.

    Other negative items, including late payments and collection accounts, can also remain on your credit reports for seven years, which can delay your progress. However, their impact on your score can diminish over time as you work to develop good credit habits.

  • Prepaid debit cards, payday loans, buy now, pay later loans and cash advance apps are examples of accounts that generally don't help you build credit. If you're looking for ways to improve your credit score, focus on other options.

    Additionally, rent, insurance and utility payments, as well as streaming subscriptions, typically don't get reported to the credit bureaus. However, you can get some credit for these payments when you register with Experian Boost®ø. Simply add your financial accounts and identify your positive payment history, and they'll be added to your Experian credit file.

Monitor Your Credit Regularly to Track Your Progress

As you work to rebuild your credit history, it's important to keep track of how your actions influence your progress. With Experian's free credit monitoring service, you'll get access to your Experian credit report and your FICO® Score. You'll also get real-time alerts when changes are made to your credit report, making it easier to keep an eye on new developments.

How Good Is Your Credit Score?

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