How to Repair Your Credit in 11 Steps

Quick Answer

Are you looking for ways to repair your credit? Here are 11 steps you can take today, such as reducing your credit utilization and monitoring your credit report, to boost your credit score for free.

A concerned man looking at his finances on the couch.

When you're trying to improve a poor credit score, companies promising credit repair may seem like saviors. But while professional help sounds appealing, when it comes to credit repair, taking matters into your own hands can save you thousands of dollars.

Credit repair companies often charge hefty fees to find and dispute inaccurate negative information in your credit reports. However, you can repair your credit for free by checking your credit report and taking measures to improve your credit score. Here are 11 steps you can take on your own to steer your credit in the right direction.

1. Check Your Credit Report

Inaccuracies in credit reports are rare but may show up from time to time, and depending on the information involved, could negatively affect your credit score. Reviewing your credit report from each of the three major credit bureaus (Experian, TransUnion and Equifax) helps you spot problems. You can get copies of your credit reports free once a week from

Review your credit report for the following:

  • Accounts: Open credit accounts and accounts closed for up to 10 years appear on your credit report. Look for accounts you don't recognize, payments inaccurately reported as late and other potential errors.
  • Personal information: This includes your name and any variations, birth date, and current and past addresses and employers.
  • Credit inquiries: Inquiries occur when a company or individual accesses your credit report. Hard inquiries occur when you apply for credit; a hard inquiry you don't recognize could indicate fraud.

2. Dispute Credit Report Errors

Inaccurate negative information, even if it's just a late payment that was actually paid on time, could lower your credit score. Errors in personal information, such a name or address reported incorrectly by a creditor, won't affect your credit score but should still be corrected. If your credit report contains something you believe is inaccurate, you have the right to file a dispute with the relevant credit bureau.

You can dispute errors in your Experian credit report online, by mail or by phone; TransUnion and Equifax have their own dispute processes. Once you file a dispute, Experian asks the company that provided the disputed information to check their records. Incorrect information will be corrected; information that can't be verified will be deleted or updated.

3. Bring Past-Due Accounts Current

Payments 30 days or more past due can be reported to credit bureaus as late. Because payment history is the biggest factor in your credit score, even one late payment can lower your score. Late payments stay on your credit report for up to seven years.

If you're late but not yet 30 days behind on a payment, pay it immediately. If the payment is already 30 or more days overdue, bring the account current as soon as possible. A payment that's 60, 90 or 120 days late will hurt your credit score more than one that's 30 days late.

Can't afford to make the payment? Contact the lender to ask about hardship options.

4. Set Up Autopay

Payment history accounts for 35% of your FICO® Score , so once your accounts are all current, keep them that way by setting up autopay. You can generally set up autopay directly with the lender or service provider or through the bank account you use to pay bills.

Automatically paying the minimum payment for credit cards and other accounts avoids late payments. Ideally, though, you should pay the balance in full every month. Make sure there's enough money in your account to cover all your autopays to avoid overdrafts or insufficient funds transactions.

5. Maintain a Low Credit Utilization Rate

Your credit utilization rate, or ratio, measures how much revolving credit you're using relative to your total credit limits. Credit utilization accounts for up to 30% of your credit score. The lower your credit utilization, the better.

Calculate your utilization rate by dividing your total credit card balances by your total credit limits. Do this for each card you hold and for the total of all your credit cards. If your utilization rate is 30% or more overall or on a single account, pay down credit card balances to potentially boost your credit scores quickly. Getting your credit utilization rate below 10% has the biggest positive impact on credit scores.

6. Pay Off Debt

Create a budget that frees up money to pay off credit card debt and other high-interest debt. The debt snowball or debt avalanche methods can be effective ways of tackling debt. Another option is getting a debt consolidation loan.

You use a debt consolidation loan to pay off your credit cards, then pay back the loan over time in fixed monthly installments. Although debt consolidation loans charge interest, rates are typically lower than credit card interest rates, ultimately saving you money. Plus, one fixed monthly payment can be easier to budget for and pay on time than multiple credit card bills.

7. Avoid Applying for New Credit

Whenever you apply for new credit, the lender checks your credit report. This is called a hard inquiry and can briefly lower your credit score by a few points. If you truly need new credit—such as a debt consolidation loan—don't apply until you find loans you're likely to qualify for.

Experian CreditMatch™ matches you with loans based on your credit score, so you can easily identify which loans you have the best chances of being approved for.

8. Keep Unused Credit Accounts Open

After paying off a high credit card balance, closing the card might seem like a smart move. But closing a credit card can negatively affect your credit score by reducing the amount of revolving credit available to you, which instantly increases your credit utilization rate.

Closing a credit card also shortens your credit history. The length of time you've had credit makes up 15% of your FICO® Score, and a longer credit history generally boosts your credit score. Even if you don't plan to use the card, it's best to keep the account open.

If you're afraid that you'll run up balances on these paid-off accounts again, remove card details from your online shopping accounts and leave the physical cards at home to reduce the risk you'll use them.

9. Apply for a Secured Credit Card

A secured credit card works just like a regular credit card, with one key difference: It requires a security deposit. To open the account, you put down a refundable security deposit (as little as a few hundred dollars), which typically determines your credit limit. If you don't pay your bill, the credit card issuer uses your deposit to pay it.

The security deposit lowers the credit card company's risk, making it easier for you to get the secured credit card even with poor credit. Use the card for small purchases to avoid reaching your credit limit. Paying the balance on time and in full each month can help improve your credit score.

10. Get a Credit-Builder Loan

As the name implies, credit-builder loans are designed to help build or rebuild your credit score. Usually for amounts of $1,000 or less with repayment terms between six and 24 months, credit-builder loans work a bit differently than traditional loans. The money you borrow is kept in a savings account or certificate of deposit while you repay the loan in fixed monthly payments.

As you pay back the credit-builder loan principal plus interest, your payment history is reported to the three major consumer credit bureaus. Making timely payments demonstrates financial responsibility and could help improve your credit score. When the loan is paid in full, you'll receive the money in the account.

11. Get Credit Counseling

Challenging situations are always easier when you have some support. Working with a reputable nonprofit credit counseling agency can help you get your credit back on track and keep it there. Credit counselors go over your finances with you and help create a plan to tackle financial issues such as budgeting, managing money and paying off debt.

The National Foundation for Credit Counseling and the Financial Counseling Association of America provide lists that are good places to start searching for a certified credit counselor.

The Bottom Line

Rebuilding your credit takes time, but be patient and you'll see positive results. To keep tabs on your hard work toward a better credit score, sign up for free credit monitoring. You'll get real-time alerts when your credit utilization changes or new activity occurs on your credit report. Keeping a close eye on your credit can keep you from falling back into bad spending habits that undo all your hard work.

In addition to the steps above, consider using Experian Boost®ø. This free feature credits you for on-time payment of rent, utility and certain streaming services bills that aren't normally reported to credit bureaus, instantly boosting your credit score.