How to Fix Your Credit in 4 Steps (Explained)

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If your credit score is holding you back from a mortgage, a car loan or a better credit card rate, the fix usually comes down to four steps: get your reports, dispute what’s wrong, lower what you owe, and add positive history. Here’s how to work through each one, in order.

▶ Watch: 6 credit fixes you can start in the next 30 days (13 min)

Step 1: Get your credit reports and scores

You can’t fix what you can’t see. Start by pulling your reports from all three bureaus — Equifax, Experian and TransUnion. The official free source is AnnualCreditReport.com, where the bureaus now offer free reports every week.

Reports don’t include your score, so pair them with a free score tool. Credit Karma shows free scores and alerts, and SmartCredit adds tools that show which actions are likely to move your score.

Step 2: Dispute errors on your credit report

Go line by line and look for:

• Accounts you don’t recognize (a possible sign of identity theft)
• Late payments you made on time
• Paid-off debts still showing a balance
• The same debt listed twice, or old negative items that should have aged off

File a dispute directly with each bureau that shows the error, and include copies of any proof. Bureaus generally must investigate within 30 days. The Consumer Financial Protection Bureau explains the process step by step. If you’d rather automate it, Dovly can track your TransUnion report and file disputes for you (see our Dovly review). You can do this yourself for free; a credit repair company can’t legally remove accurate information.

Step 3: Pay down balances and keep payments on time

Payment history and credit utilization — how much of your available credit you’re using — are the two biggest parts of most credit scores.

• Never miss a payment. Set up autopay for at least the minimum on every account.
• Lower your utilization. Try to keep each card’s balance under 30% of its limit; under 10% is even better.
• Pay before the statement date. Your balance is usually reported on the statement date, so paying earlier can lower the number that shows up.
• Keep old accounts open unless they carry an annual fee you don’t want to pay.

Step 4: Add positive credit history

If your file is thin or damaged, you need new on-time payments reporting to the bureaus.

• Credit builder account: Self lets you make small monthly payments that are reported to the bureaus, building payment history as you save.
• Secured credit card: the Credit Builder Card reports to all three bureaus. Use it for a small purchase each month and pay it in full.
• Become an authorized user on a family member’s older card with a low balance and perfect payment history.

How long does it take to fix your credit?

Corrected errors can show up within one or two billing cycles. Lower balances usually help as soon as the new balance is reported. Rebuilding after late payments or collections takes longer — most negative items stay on your report for seven years, but their impact fades as you add new on-time history.

Getting ready to buy a home?

Mortgage lenders look at all three bureaus, so start this process a few months before you apply. If you want to know where your scores need to be for the loan you’re after, The Rate Update can review your situation with you.

Affiliate disclosure: some links on this page are affiliate links, and we may earn a commission if you sign up, at no extra cost to you. Dan Frio | NMLS #246527 | PBT Bancorp | NMLS #257781. Mortgage products are originated by PBT Bancorp, NMLS #257781. Equal Housing Lender.