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How to Repair Your Credit in 12 Steps

Dahna Chandler • September 26, 2023

A credit score is a vital number in your financial life. It’s a three-digit number between 350 and 850 that gives lenders an idea of how likely you are to repay debts. Your credit scores are calculated based on the information in your credit reports from the three major credit bureaus—Equifax, Experian, and TransUnion.

This three-digit number determines whether you can get approved for credit cards, loans, mortgages, apartments, and more. It also influences the interest rates and terms creditors offer you. Lenders review your FICO® score, which you only get from the three major credit reporting agencies, in about 90% of credit decisions.1

That’s why you should work to maintain a healthy credit score. But what if your credit is damaged?

Don’t panic. You can learn how to repair credit. By knowing how to fix bad credit, you can rebuild and improve your credit standing with time and effort.

12 steps for repairing your credit

Now that you understand what a credit score is and how it’s calculated, let’s get into the actionable steps you can take to improve it. Repairing your credit scores is not an overnight process, but you can improve them with dedication and the right strategies. Here are some guidelines on how to repair credit.

1. Review your credit report

The first step in repairing your credit is to get a copy of your credit report from all three major credit bureaus: EquifaxExperian, and TransUnion.

You can get one free repoty every 12 months directly from each credit bureau or by going to You can spread your requests over the year, getting one credit report every four months to help you monitor your credit.

Then, read over your credit reports for discrepancies and dispute any errors using the process below. Each credit reporting agency offers a dispute process. Follow their process carefully, as even a small mistake on your credit report can impact your credit score. Fixing errors can raise your credit score substantially.

2. Challenge inaccuracies in your credit report

One in three people find errors on their credit reports, which can significantly impact their credit scores.2 You can dispute and request the removal of any inaccurate information on your credit report.

File disputes with each bureau online or by mail, providing any required documentation. They must investigate your dispute within 30 days or remove the disputed items from your credit report.3 The dispute process can take time, so be patient but persistent. Then, monitor your credit, which you can do for free, to ensure no new negative entries appear on your credit reports. It also helps prevent identity theft, another way credit scores get ruined.

3. Repay your debts

Your payment history accounts for 35% of your FICO credit score, and it’s the factor lenders consider most in offering credit. Repaying outstanding credit card and loan debts reduces your overall utilization ratio, which makes up 30% of your FICO credit score. Prioritize paying down balances, especially on any maxed-out cards. Focus on paying off debts with high-interest rates first.

Even paying a portion of your debt can lower your utilization. Make a budget that helps you to free up money for repayments. You can use the debt avalanche or debt snowball method to tackle your debts systematically.

4. Allow time for negative entries to be removed

Negative entries like bankruptcies and late payments will eventually fall off your credit report, improving your score over time. The waiting period can be several years, but it’s worth it.4 Avoid trying to remove valid negative items prematurely. Focus on adding positive entries with sound financial habits, so you’re ready when negative entries expire. You can use free tools to monitor your progress.

5. Pay your bills on time

Always paying your bills in full and on time is the most critical factor in credit scoring. Setting up autopay for your bills can help you avoid late payments, which can severely impact your credit score. If you must pay the minimum, pay earlier than the due date. Consistency is crucial since one late payment can undo months of progress.

Check out our guide on how to pay bills on time.

6. Keep credit utilization rate low

Keeping your credit card balances low compared to your total available credit limit helps maintain a good credit utilization ratio. Aim to keep balances under 30% of your overall credit limit. If possible, pay off cards in full each month. This shows lenders that you’re responsible with your credit and can manage debt well.

7. Maintain open credit accounts you’re not actively using

Keeping old credit cards open can help improve the length of your credit history, which makes up 15% of your credit score. Only charge something minor, like a low-cost monthly streaming subscription, on the card each month if you need consistent activity to keep it open. Then, pay the charge in full and on time every month. However, consider closing accounts with high annual fees that could negate the benefits.

8. Get a secured credit card

secured credit card can be a helpful tool for strengthening your credit. Responsibly using one can help rebuild your credit history.

The refundable deposit you provide lowers issuer risk to credit card issuers. Most financial institutions report the payment activity to the credit bureaus, which can help increase your score. Use these cards wisely, and your credit score may begin rising.

9. Get a credit builder loan

A credit builder loan can help you create a positive payment history that is reported to the credit bureaus. This, in turn, can improve your score. You repay money held in a bank account and receive the proceeds later. On-time credit builder loan payments demonstrate financial responsibility and earn lender trust.

10. Become an authorized user

If you can’t qualify for new credit right now, ask a friend or family member with good credit to add you as an authorized user of their credit card. Their positive history gets added to your credit file, helping improve your score.

Check that their card issuer reports authorized user activity to all three credit bureaus. To keep your friend or family member’s credit in good standing – and maintain their trust – avoid using their credit card unless you can pay on time.

11. Use nontraditional credit reporting

Services that report on-time rent and utility payments can add a positive payment history to your credit profile. These nontraditional credit reporting services are especially useful for helping rebuild credit. Ask landlords and utility companies to report your timely payments or use third-party services that do it for you.

12. Only obtain credit when it’s necessary

Each time you apply for new credit, the lender or credit card issuer makes a hard inquiry on your credit, which can lower your score by a few points. New accounts also lower your credit age, and too many inquiries can signal risk to lenders.

When working on credit score repair, be strategic about when and why you apply for credit. Only apply for new credit accounts when you genuinely need them since too many new applications can negatively impact your score. Space applications out and limit them.

Start building credit with the secured Chime Credit Builder Visa® Credit Card – no credit check required.*

Maintaining an ideal credit score

Credit reporting agencies base your credit score on several factors. Each has a different weight. They include payment history, credit utilization, length of credit history, new credit inquiries, and credit mix to calculate credit scores.

  • Payment history carries the most weight at 35%5, so paying your bills on time is essential.
  • Keeping balances low compared to total credit limits, also called your credit utilization, helps your credit scores.
  • Applying for too much new credit at once can lower your credit scores, so it’s best to space out applications over time.
  • Long credit histories with accounts open for many years raise your credit score, so avoid closing old accounts unnecessarily.

Scores range from 300 to 850. Higher scores mean better rates, but even being in the ‘good’ range of 670 to 739 can qualify borrowers for competitive options. How you manage the factors that affect your credit score determines your credit score range.

Here’s an explanation of the credit score ranges according to FICO and how lenders perceive them:

300 – 579: PoorLenders see borrowers with poor credit as very high-risk. You’ll likely be denied credit, need to put down a deposit, pay a fee, or get a co-signer to get approved.
580 – 669: FairFair credit is still seen as risky. You’ll get approved, but likely with higher interest rates or lower credit limits than those with good to excellent scores.
670 – 734: GoodGood credit meets most lenders’ requirements. You’ll qualify for competitive rates, loan amounts, and terms. Many borrowers fall in the good credit range.
740 – 799: Very GoodWith very good credit, you’ll get approved for almost anything. You’ll qualify for the best interest rates, often the largest loan amounts, and best terms.
800 – 850: ExceptionalExceptional credit means easy approval for any loan at the best rates and terms lenders offer. Those with 800+ scores are rewarded with special offers others can’t usually get.

The higher your credit score, the better offers you’ll receive from lenders. Even small score differences can mean big savings over the life of a loan. In most cases, you’ll need a “good” credit score – 670 or higher – to get approved for credit at decent rates. The higher your score, the more likely you’ll be offered lower interest rates that save you money.

On-time payments, low balances, and a long history are the most significant factors in determining your credit score. Maintaining responsible money management habits in these areas over time is the key to improving your credit scores.

Repairing your credit can improve your financial standing

When you repair your credit, you can access more affordable loan rates that save you money over time. You also increase your chances of approval for future credit applications.

Repairing your credit is not just about fixing a number; you are improving your overall finances and habits. By following these steps to repair credit, you’ll be on your way to the financial peace of mind and opportunities that come with a higher credit score.

Get started on your credit repair journey and a good credit score today by learning more about credit repair strategies.

Chime® is a financial technology company, not a bank. Banking services are provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card and the Chime Credit Builder Visa® Credit Card are issued by The Bancorp Bank, N.A. or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit and credit cards are accepted. Please see the back of your Card for its issuing bank.

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Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank, N.A. and Stride Bank, N.A. (“Banks”). Banks are not responsible for the accuracy of any content provided by author(s) or contributor(s).

* To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

1 FICO® Scores are developed by Fair Isaac Corporation. The FICO Score provided by, Inc., also referred to as Experian Consumer Services ("ECS"), in Experian CreditWorks℠, Credit Tracker℠ and/or your free Experian membership (as applicable) is based on FICO Score 8, unless otherwise noted. Many but not all lenders use FICO Score 8.

In addition to the FICO Score 8, ECS may offer and provide other base or industry-specific FICO Scores (such as FICO Auto Scores and FICO Bankcard Scores). The other FICO Scores made available are calculated from versions of the base and industry-specific FICO Score models. There are many different credit scoring models that can give a different assessment of your credit rating and relative risk (risk of default) for the same credit report. Your lender or insurer may use a different FICO Score than FICO Score 8 or such other base or industry-specific FICO Score, or another type of credit score altogether. Just remember that your credit rating is often the same even if the number is not. For some consumers, however, the credit rating of FICO Score 8 (or other FICO Score) could vary from the score used by your lender. The statement that "90% of top lenders use FICO Scores" is based on a third-party study of all versions of FICO Scores sold to lenders, including but not limited to scores based on FICO Score 8. Base FICO Scores (including the FICO Score 8) range from 300 to 850. Industry-specific FICO Scores range from 250-900. Higher scores represent a greater likelihood that you'll pay back your debts so you are viewed as being a lower credit risk to lenders. A lower FICO Score indicates to lenders that you may be a higher credit risk. There are three different major credit reporting agencies — the Experian credit bureau, TransUnion® and Equifax® — that maintain a record of your credit history known as your credit report. Your FICO Score is based on the information in your credit report at the time it is requested. Your credit report information can vary from agency to agency because some lenders report your credit history to only one or two of the agencies. So your FICO Score can vary if the information they have on file for you is different. Since the information in your report can change over time, your FICO Score may also change.

2 Information from Consumer Reports' “More Than a Third of Volunteers in a Consumer Reports Study Found Errors in Their Credit Reports" as of September 20, 2023:

3 Information from Experian's “How Long Do Credit Report Disputes Take?" as of September 17, 2023:

4 Information from FTC's, "Fair Credit Reporting Act: Updated May 2023," as of September 20, 2023.

5 Information from Experian's, “What Affects Your Credit Scores?" as of September 20, 2023:

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