Credit Repair: How to Do it Yourself

Credit Repair: How to Do it Yourself


You spend your entire adult life working hard to stay on top of your debts, knowing very well this three-digit number stands between you and the finer things in life.

  • A mortgage.
  • A car loan.
  • A business loan.

All it takes is one missed payment to watch your score drop dramatically. Suddenly, everything you worked so hard for is once again out of reach.

Thankfully, there are plenty of things you can do by yourself to repair your credit and regain control over your financial freedom.

Here are seven ways to do that:

Request Your Free Annual Credit Reports

There’s only one way to know for sure what’s behind your low credit score:
a free annual credit report.


This free report is available to all Americans once every 12 months and will give you a detailed look at your accounts and history from the three major credit companies.

TransUnion, Equifax, and Experian.

Here are some vital things to look for on your report:

  1. Mistakes, like seeing the account of somebody else with the same name
  2. Payment history to see if you’re paying enough and on time (35% of score)
  3. Credit usage, as higher credit utilization raises your score (30% of score)
  4. Fraudulent accounts opened in your name by someone else

Scouting out your credit report has two benefits. You can figure out where you’re going wrong financially, and you can dispute mistakes and errors that are impacting your score.

Pay Your Bills & Debts On Time Each Month

Nothing will hurt your credit score more than missed or late payments. Paying your debt just 30 days late can cause a 100-point drop to your credit score.

But it’s not just the drop that’s concerning. It’s the fact that these marks will stay on your credit history for seven years. These negative marks will count against you if you apply for a loan today, or even five years down the road.

The convenience of credit and the false assumption that you only need to pay those minimum payments will also do you away in terms of your credit score.

So how do you avoid this? Pay in cash whenever you can, schedule auto-pay on your bills if you’re forgetful, and always pay your bills in full each month.

Prioritize High-Interest Loan Payments

You’re drowning in debt and don’t know where to begin. Do you pay off the smaller bills first so you can close out the accounts you no longer need? Or should you slowly chip away at the bigger loans looming overhead?

Start with the high-interest loans.

Specifically, the credit cards in which you’re approaching your credit limit.

For every day you miss a payment on these cards, your balance will accumulate dollars and cents in the form of interest. You’ll also begin the next month with a portion of your credit limit already used up.

Here’s what you should do:

  1. Pay your rent, utilities, groceries, and any other mandatory bills for the month.
  2. Put 20% of your earnings into savings.
  3. Use whatever is left over at the end of the month to put toward your debts.

Add Some Variety to Your Open Accounts

Staying current on your credit card and loan payments will do wonders for building your credit score over time.

But many people overlook the thing that impacts 10% of your credit score: Credit mix.

That means you have a mix of revolving credit (debts that you rack up every month, like a credit card), and installment credit (steady monthly payments, like a car loan).

Not having both won’t hurt you, per se, but having a mix of both can help. So, consider getting a credit card if you only have loans on your credit history. And don’t be afraid to take out a small loan when leasing a car or buying a home.

Just be sure you can handle new accounts financially.

Ask to Become an “Authorized User”

You need a credit card to build credit, but you also need some pre-existing credit history to be eligible for a credit card.

It’s an endless cycle.

Well, that’s unless you have a family member or friend that has excellent credit and is willing to do you a little favor. Ask them about becoming an authorized user.

This will add your name to the account of another person, though they’re still 100% responsible for completing payments on-time and in full. You don’t even have to spend a dime with the card. As they pay their bills on time, your score and credit history will climb.

Inquire About Raising Your Credit Limits

Every credit card comes with something called a “credit limit.” This is the maximum balance you can have on your credit card at one time, as determined by your lender. It’s not unusual for this limit to be over $5,000.

But this concept is often misunderstood. Just because you have a $5,000 credit limit, that doesn’t mean you should maintain anywhere near a $5,000 balance on your account.

Why? Because approaching your credit limit increases your credit utilization ratio. And exceeding 30% of your credit utilization ratio can take a toll on your credit score.

There’s a possible solution here:
Requesting a higher credit limit from your lender.

Assuming you’re slowing or maintaining your current spending habits, this will lower your credit utilization ratio. Your score will benefit in the long term.

Consolidate Your Loans & Debts

Having many credit cards isn’t necessarily a problem, though it can be a little hectic to keep track of them. But it’s not all peaches and rainbows. It becomes quite a problem if you have several cards that are carrying balances.

Consider debt consolidation.

This is a method where you transfer your balance from one credit card to another. Ideally, the new card would be a 0% APR card that won’t charge you extra for carrying a balance as you chip away at your debt.

Not only does this reduce the sheer number of payments you have to make each month, but it also cuts down on interest accumulation.

You won’t find a credit repair method quite as successful as this one. About 70% of people will see an increase of 20+ points by doing so.

other valuable tips:


Raising your credit score is a confusing yet worthwhile process. Your score will take a temporary dip whenever you open or close an account. And sometimes, your score will climb or fall by 20 points, seemingly out of the blue.

Don’t let these things discourage you! Even raising your score by 20 points over the next few months can make a world of difference the next time you apply for a low-interest loan.

Author Bio:
Adam Marshall is a freelance writer who specializes in all things apartment organization, real estate, and college advice. He currently works with Paramount 3800 to help them with their online marketing.

Image Credit: how to fix your credit by Pixabay

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College Campus reference:

GUIDE: getting a free credit report


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