How to fix your own credit

* This is not a financial advice article. Please contact a financial advisor if you need financial assistance.

(Ad) Your credit score plays a major role in all of your financial opportunities. When your score is high, you gain access to low interest rates on loans, more generous mortgage terms, and better rates on your insurance. However, when your credit score is low, you lose out on most financial opportunities and end up with steep interest rates on any loans you do qualify for.

Thankfully, your credit score does not stay the same forever. If you’re looking to boost a low score, there are several steps you can take to speed up the process and gain access to the financial opportunities you’ve been missing.

In this guide, we’re going to provide you with an 8-step process to fix your own credit score.

If you don’t have the time to fix your own credit score and would rather hire a reputable company to do it for you, we recommend Credit Saint.

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8 Steps to Fix Your Credit Score Fast

Knowing what does and does not impact your credit score can be challenging. While some of your financial activities directly impact your score, other actions seem not to affect your credit whatsoever. Pinpointing the steps that impact your credit score and prioritizing those activities can help you increase your credit score faster and more effectively.

Here are eight reliable steps for how to fix your credit score.

1. Get a Copy of Your Credit Report

Before you begin trying to improve your credit score, you should gain a better understanding of what you’re working with.

Your credit report details all your installment and revolving credit accounts, recent payments, balances, and account statuses. Reviewing this report can allow you to see any negative items that are currently impacting your score and help you understand previous activities that hurt your credit.

You can receive a free credit report at any time through the Federal Trade Commission. Thankfully, viewing these free reports does not impact your FICO score in any way.

2. Dispute Any Credit Reporting Errors

Once you receive a copy of your report, your next step is to check your credit report for any errors or inaccuracies.

Creditors sometimes report your activity to the three major credit bureaus inaccurately. For example, they may make a typo on the report, misspell your name, or input your balances incorrectly. However, in some cases, creditors may even report negative items to the credit bureaus that you are not responsible for, leading those items to wrongfully affect your credit score.

If you notice any inaccuracies in your report, your best course of action is to dispute them with the credit reporting agencies. You can dispute errors by sending a letter to the credit bureau responsible for reporting that item and explaining how the item is in error. If your letter is successful, the credit bureau will remove the item from your report, eliminating its impact on your score.

3. Always Pay Your Bills on Time

Your loan and bill payments make up a significant portion of your credit score. When you fail to make payments on time, your lender reports this activity to the three credit bureaus, lowering your score. However, every on-time payment you make boosts your score a little bit.

As you try to improve your credit score, you should make a special effort to pay your bills on time. Setting up automatic payments is an excellent way to ensure that you make all of your bill payments by the due date. If you’d prefer not to set up autopay, you can at least put a reminder on your phone every month to help you remember when minimum payments are due.

Making on-time payments will only enhance your efforts to repair your credit score. This activity is well worth the effort for the immense impact it can have on your credit.

4. Keep Your Credit Utilization Ratio Below 30%

Your credit utilization ratio, or debt-to-credit ratio, is the portion of your available credit that you are currently borrowing. For example, if credit card companies offer you a credit limit of $50,000 and you currently use $3,000 of that limit, your credit utilization ratio would be 6%.

Even if a creditor offers you a high credit limit, that does not mean you should take all of the money you can get from it. On the contrary, keeping your credit utilization ratio low can show creditors and financial institutions that you are responsible with the credit available to you. As a result, they will be more likely to offer you loans and other financial opportunities.

Your credit utilization ratio also impacts your credit score. Most credit models suggest a strong correlation between this ratio and your credit score. However, keeping your debt-to-credit ratio below 30% can limit this factor’s impact on your credit score, helping you rebuild credit faster.

5. Pay Down Other Debts

As we mentioned earlier, your credit report keeps a detailed record of all of your current credit accounts and their balances. Having outstanding balances on multiple credit accounts can negatively impact your score. However, making regular payments to pay down outstanding debts can improve your score.

First, you should consider all of the debt you currently have. Your debts can include:

• Personal loans
• Credit card debt
• Mortgages
• Student loans
• Car loan debt
• “Buy now, pay later” loans
• Overdrafts

Once you have a list of your debts, create a plan for how you will pay balances as quickly as possible. Maybe you need to decrease other areas of your budget so you can dedicate more money to your debt each month. Or perhaps you want to pay off one or two debts completely. Either way, staying on top of your debts is an effective way to improve your credit score.

6. Pay Late or Past-Due Accounts

When you fail to make the minimum payment to a credit card or loan account by the due date, the account becomes “past-due.” Many people see that they have a past-due account and figure that it doesn’t matter when they pay it off because the damage is already done. However, the longer a past-due account sits on your credit report, the more it will impact your credit score.

Along with paying your bills on time and attempting to pay off any loans, you should make every effort to make missed payments and pay any remaining fees on past-due accounts. Once you get caught up with late payments, those accounts will no longer appear as “past-due” on your credit report, limiting their impact on your score.

7. Increase Your Credit Limits

We’ve already discussed how your debt-to-credit ratio impacts your credit score. While the best-case scenario would be to limit your usage to 30%, it may not be possible to achieve this low ratio right away if you already have several loans and debts. Another solution you should consider is asking your creditor to increase your available credit limit.

You can ask your creditor to increase your available credit limits by calling or emailing them. However, be sure to request that they do not perform any hard credit inquiries while making their decision, as these could lower your FICO score by a few points.

Asking to increase your limits is worth a shot. If you are successful, you could see an improvement in your score within a few weeks.

8. Keep Your Old Credit Cards Active

One final way to fix credit quickly is to keep old credit cards active even if you no longer use them. Keeping your credit accounts open can provide several benefits.

First, every credit card account you have impacts your debt-to-credit ratio. The more open credit you have, the higher your overall limit will be, making it easier to stay below 30% in your utilization ratio.

Next, your credit age can impact your score. Mortgage lenders and credit card issuers look at your average account age to determine your creditworthiness and financial responsibility. If they see that you have opened several new accounts in the past year, for example, they may hesitate to offer you a loan. However, keeping old credit card accounts open can raise that average credit age.

Finally, your credit mix, which includes the different types of loan accounts you have open, impacts your credit score. The more credit card accounts you have open, the broader your credit mix will be, positively impacting your credit report. As a result, keeping old credit card accounts open can improve your credit mix and overall credit report.

Keep in mind that even though you may not need to pay any monthly payments on these old credit card accounts, creditors may still charge you an annual fee. Failing to pay this fee on time could lower your score.

Can You Hire a Credit Repair Company to Fix Your Credit?

If you have a bad credit score, you may be willing to do everything possible to improve your score. One option you should seriously consider is hiring a credit repair service to take over some of the responsibility of fixing your credit. 

Fixing errors on your credit report is an important step in building credit. Earlier, we discussed how you can attempt to correct the mistakes on your credit report by sending a letter to your credit reporting agency. While this process seems simple enough, it is not always successful. Additionally, it often takes months of back and forth with credit bureaus to complete the dispute process.

Instead, you can hire the best-rated credit repair company to dispute errors on your credit reports for you. Credit repair companies can help you identify errors or discrepancies on your credit report, then contact the credit bureaus to remove these items from your report. They have all of the necessary resources to give you the best possible chance of successfully eliminating these items.

Not only can repair services help you remove inaccurate items, but they can also dispute items that are supposed to be on your report but that contain a minor typo or inaccuracy. For example, if any of the late payments on your credit report state the wrong amount, the top credit repair companies can request to remove these items entirely, eliminating their effect on your credit score.

Credit Repair Process

Repair companies typically follow this process to dispute items on your credit report and help you repair your credit:

• Receive copies of your credit reports from all of the major credit bureaus.
• Review each credit report closely, paying attention to your payment history, negative items, credit card balances, savings account information, and other aspects of your credit history.
• Identify any discrepancies on your credit reports, including false collection account statuses, outdated information, wrong account numbers, and inaccurate loan balances.
• Send letters to the credit bureaus detailing the errors they found and requesting that the bureaus verify the information in your credit history.

Sometimes, asking the credit bureaus to verify the negative items is enough for them to remove these items from your account. Credit reporting agencies must have evidence of why they added a negative item to your list. If they cannot come up with this evidence, they will need to remove the item altogether.

Credit repair services can also help you fix your score in other ways. They can provide credit counseling, send you notifications about changes to your credit scores, and give tips to build a good credit history. However, these organizations can only do so much for your credit. It is still up to you to follow the steps above, pay bills on time, and behave responsibly. If you need a good recommendation, you can find a good credit repair company at Mysanantonio.com

Our Top Repair Service

If you’re considering working with a credit repair service, we recommend CreditSaint.com. This company offers reliable, effective credit repair and negative item disputes and has helped thousands of customers rebuild their credit scores. The company also provides free consultations, allowing you to learn more about its services and processes before making any monetary commitments.

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What Is the Credit Repair Organizations Act?

The Credit Repair Organizations Act (CROA) regulates how credit repair services can behave and interact with their clients. This act helps prevent misleading advertising and exaggerated claims that could lead consumers to fall into a credit repair trap and damage their credit further.

More specifically, the CROA regulates these companies in the following ways:

• Prevents repair services from making outlandish claims—for example, that they can improve credit scores even when their clients do not have any inaccuracies in their reports.
• Requires repair companies to state their fees up front.
• Prohibits repair companies from misleading customers into thinking they could not complete the services themselves.
• Requires companies to clarify that they cannot guarantee any improvements to credit scores.

If companies do not comply with these regulations, they risk the Consumer Financial Protection Bureau taking legal action against them.

Tips to Avoid Credit Repair Scams

Unfortunately, credit repair scams are rampant within the credit building industry, even with the CROA in place. Some companies claim to help you rebuild your credit score while stealing your personal information and running rampant with your bank account. Others simply overcharge you for services you could complete yourself.

Here are a few tips to help you avoid scams as you search for a credit help organization:

• Never pay up front.
• Avoid claims that sound too good to be true.
• Ask for more details about the service before hiring it.
• Never agree to rebuild your identity to repair your credit.
• Read reviews and ratings before working with a company.

Overall, you should be cautious when working with a new company and never give your personal information over to a service that you do not entirely trust.

How Long Does It Take to Clean Up Your Credit?

Several factors affect how long it will take to improve your FICO score. These include:

• Your initial score
• Your goal score
• The reason your score is low
• The amount of debt you have

Some negative items remain on your payment history for several years and continue impacting your score throughout their duration. For example, bankruptcy can stay on your credit report for seven to ten years.

Other items only stay on your credit report for a few months. For example, when you max out a credit card account, this item will only remain for three months. When you apply for a new credit card, you can expect this hard inquiry to stay on your report for three months as well.

Unfortunately, repairing your credit is a relatively slow process. Even if you follow all of the steps above, it can take months or years to boost a low score into the “good” or “excellent” category. While you should still do everything you can to improve your credit, you should also be patient and understand that each action you take will slowly but surely boost your score.

Final Thoughts

Repairing your credit may not be as challenging as it sounds. However, you will need to put in the effort to ensure that you take every positive step you can toward rebuilding your score. Setting reminders about payment due dates, paying more money toward your loans each month, and disputing negative items on your credit report can all add up to improve your score over time.

If you’re looking for a way to speed up the repair process, hiring a repair company is a worthy choice to consider. While these companies can only do so much to help your credit, they could give you the boost you need to get out of the “bad” range and into the “fair” range.

Finally, don’t be discouraged if you do not see an immediate improvement in your score. Getting your credit fixed takes time, but your future self will thank you.

*This article is provided by an advertiser and not necessarily written by a financial advisor. Investors should do their own research on products and services and contact a  financial advisor before opening accounts or moving money. Individual results will vary. Foreign companies and investment opportunities may not provide the same safeguards as U.S. companies. Before engaging with a company, research the laws and the regulations around that service, and make certain the company is in compliance. For comprehensive guidance on U.S. investments and financial regulations, visit the Securities and Exchange Commission (SEC)’s Investor.gov.