Many companies featured on Money advertise with us. Opinions are our own, but compensation and
in-depth research determine where and how companies may appear. Learn more about how we make money.

By: and
Published: Jun 07, 2021 13 min read

Repairing bad credit is possible but time-consuming. It’s also a minefield. You need to know what steps to take, where to find help and which companies to avoid. The stakes are high, and the consequences could haunt you for years.

Your credit report, history and score all wield a huge amount of power over your finances. They affect not only whether you get approved by lenders for things like a mortgage, personal loan or a car loan, but also the specific terms of the agreement, like how favorable your interest rate is going to be.

If you want to learn about the various tools, methods and habits that can help you improve a poor credit score, read on.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
Find the #1 Credit Repair in Your State.
Click on your state to speak with a locally licensed expert. Let Credit Saint do the work for you.
HawaiiAlaskaFloridaSouth CarolinaGeorgiaAlabamaNorth CarolinaTennesseeRIRhode IslandCTConnecticutMAMassachusettsMaineNHNew HampshireVTVermontNew YorkNJNew JerseyDEDelawareMDMarylandWest VirginiaOhioMichiganArizonaNevadaUtahColoradoNew MexicoSouth DakotaIowaIndianaIllinoisMinnesotaWisconsinMissouriLouisianaVirginiaDCWashington DCIdahoCaliforniaNorth DakotaWashingtonOregonMontanaWyomingNebraskaKansasOklahomaPennsylvaniaKentuckyMississippiArkansasTexas
Credit Repair Plans & Pricing

10 Tips for repairing bad credit

Martin Lynch, director of education at Cambridge Credit Counseling, says that you don’t have to be a financial wizard to fix your credit successfully. The secret is to be proactive, so you don’t stay in the same position forever.

Here are some ideas to help you get started.

1. Check for errors on your credit report

Download a copy of your credit report to make sure there aren’t any inaccurate negative items. According to the Consumer Financial Protection Bureau, common credit report errors include closed credit accounts showing as open, debts that appear multiple times and incorrect balances.

You can get a free credit report from all three major credit bureaus (Experian, Equifax and TransUnion) by visiting Note: This won’t give you a score, but it will show you negative information and areas that may need improvement.

If you spot any incorrect information on your credit report, you can dispute it by writing a letter to the appropriate credit reporting agency. The Federal Trade Commission has an example credit disputing letter can look at if you’re unsure how to do this.

2. Look into statutes of limitations

Look over your credit report for any bills you’ve overlooked or accounts you might have forgotten about. Verify that the statutes of limitations on your debts haven’t run out — if enough time has passed, it might prohibit collection agencies from suing you. (Check with an attorney to confirm.)

3. Rethink your credit utilization ratio strategy

Your credit utilization ratio measures how much credit you’re using in relation to the overall credit limit you have at any given time.

This ratio should never go over one-third or roughly 30% of your spending limit. For example, if you have a total of $1,000 of available credit, you don’t want to use more than $300.

“Once it goes over that third, it just counts against you,” says Linda Jacob, director of education at Consumer Credit of Des Moines.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
If this sounds overwhelming, contact a credit repair expert
Credit Saint can identify and challenge questionable items on your behalf. Click below to start repairing your credit.
View Credit Repair Plans & Pricing

4. Make a plan to pay all your bills on time

Payment history makes up 35% of your credit score, so it’s crucial to address late payments and make plans for the future. Jacob says it’s the first tip she gives new clients.

You should also prioritize paying off any credit card accounts in collection. “You’ve got to get those paid in full as quickly as possible to increase your score because they’re just going to sit there until you do it,” Jacob says.

If you need help creating a repayment strategy, Jacob recommends reaching out to a certified financial planner or a credit counselor. Nonprofit organizations like the Association for Financial Counseling and Planning Education and the National Foundation for Credit Counseling can connect you with one.

5. Become an authorized user on someone’s credit card

An authorized user is someone added to an existing credit card account under someone else's name.

Authorized users can use the card as if it was their own, but they’re not responsible for any credit card debt they rack up. And since they're sharing the card’s payment history and utilization rate, this can increase their credit score over time.

The financial risks here are mostly for the cardholder, not the authorized user. But as someone trying to build credit, Lynch says you do have to ask some “uncomfortable questions” before sealing the deal, like inquiring about the person’s payment habits to determine whether this is the right move for you.

6. Use a program to boost your credit score

Some programs can raise your FICO score by expanding your credit file. They do this by including alternative data as part of your credit report. This is data not typically found on traditional credit scoring models.

Here are two of the most popular ones:

Experian Boost

Experian Boost enhances your credit file by reporting any payments made to subscription services, including Hulu, Netflix and HBO Max. It also reports your phone and utility payments. The best part? It is completely free and can help boost your credit score almost instantly.


Just like Experian Boost, UltraFico is free, but instead of reporting utility bills or subscription payments, its scoring model focuses on assessing how “risky” you are as a borrower. The program does this by looking at your checking, savings or money market accounts.

7. Use a rent reporting service

If you’ve been paying your rent religiously, you can use it to your advantage.

Some landlords, particularly those who manage multiple properties, tend to use platforms to keep track of their tenants' payments. These platforms also allow them to report rent payments to the credit bureaus.

If your landlord doesn't use a rent-tracking platform, you can always subscribe to a rent reporting service like Esusu or RentTrack. These services post your positive rental payments to your report for a monthly fee.

8. Consider debt consolidation

Debt consolidation consists of bundling all your debts into one. This often leads to a lower interest rate or a lower monthly payment when compared to individual bills.

This repayment strategy is beneficial for those who have trouble juggling multiple due dates or have various high-interest credit card balances.

9. Avoid bad habits

Don’t apply for many new credit cards or close several old accounts without an overall strategy. With credit, everything is connected, so closing old and opening new accounts could hurt your history and credit mix.

For example, applying for several new credit cards over a short period of time could result in repeated hard inquiries, which can decrease your credit score. Consider getting a credit-builder loan or secured credit card instead.

10. Be patient

Rebuilding bad credit isn’t a fast process. Negative marks or delinquencies, such as missed payments, can stay on your credit report for up to seven years, while some types of bankruptcies can stay on your report for up to a decade.

It may take a few months — or even years — for a person to raise their credit, but it is feasible with some elbow grease.

Lynch says that the most important thing is to be patient, as he often encounters people who are so anxious to fix their credit that they end up making rash decisions that lead to crucial mistakes.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
A low credit score not only hurts your chances of getting approved, but can also affect your interest rate
Credit Repair experts can help you improve your credit score by identifying and disputing mistakes in your report.
Repair My Credit

Do credit repair companies work?

Though you can repair your credit yourself for free, it can be a tedious process, especially if you’re unsure what you’re looking for. That’s when hiring a credit repair company comes in handy.

“Any person can repair their own credit,” says Howard Dvorkin, chairman at “We also pay people to change our oil, but any person can do their own oil change — you have to have some knowledge and do some prep work. It’s the same thing.”

If you choose to utilize credit repair services, make sure it’s legitimate, as the credit repair business is an area rife with scams.

So, how do you choose a legit company? Here are some tips to help guide you.

Be aware of your rights

First, know the facts: credit repair companies have to follow the Credit Repair Organizations Act, which forbids them from lying to you or charging you in advance.

Before the company takes action, you’ll have to sign a contract that fully lays out the payments you'll have to make, the services it will provide, and the timeline it’s going to follow.

And, most importantly, if you change your mind, you’re allowed to cancel your contract within three days.

Know what credit repair companies can and can’t do

If a company offers to create a “new credit identity” for you, stay away. The FTC states that companies that offer such services engage in fraudulent activities involving other consumers’ social security numbers.

In general, any company that makes overblown claims, like guaranteeing to fix your credit without first evaluating your case, is probably a scam.

Jacob says that no company can clean up your credit accounts like that. Items may be temporarily removed from your report while they’re being investigated, but “if the creditor can prove the account and money owed are in fact yours, they will put it back.”

Unfortunately, there is no magic fix to repairing bad credit.

Check the company’s reputation

Finally, Dvorking says to check out the credit repair company’s track record by looking it up on consumer review websites, such as the Better Business Bureau.

Another tip, according to the CFPB, is to ask yourself questions like “Is the company being upfront and forthcoming about their services and fees?” and “What specific services will be provided?” as you’re vetting the companies.

How to repair bad credit FAQs

What is a bad credit score?

Credit scores range between 300 and 850. According to Equifax, anything below 580 is considered a “poor” credit score. If you’re looking to have good credit, you’ll need to have a score upwards of 670.

How to fix bad credit?

To fix bad credit, you first need to assess the factors that are dragging down your score.

If your main issue is that you have a short credit history, you can boost your credit score using a rent reporting service, a program that reports utility payments or a secured credit card.

But if you have negative marks on your report or a high credit utilization ratio, then your best bet is to come up with a smarter repayment strategy, like a debt consolidation plan.

How long do negative items stay on your credit report?

Negative marks on your credit report, such as late or missed payments and Chapter 13 bankruptcies, stay on your credit report for seven years.

Chapter 7 bankruptcies can stay on your credit report for up to 10 years.

Summary of How to Repair Bad Credit

Fixing your credit can be a lengthy process, but in the end, it is worth it. You can do this on your own or hire a credit repair company to help you out.

Regardless of which route you take, credit monitoring, on-time monthly payments and healthy financial habits are key to having better credit. The most important thing is to be patient and stick to a strategy that's been proven to succeed.