Here’s how to repair your credit — and maintain it, too

A good credit score can affect everything from your chances to receive loans or credit cards to your ability to rent an apartment. If your score isn’t where you want it to be, the good news is that it’s not permanent.

Rebuilding credit takes consistency, patience and a strategy that fits your situation. Whether you’re starting from scratch or recovering from past mistakes, there are steps you can take to get your score back on track.

1. Check your credit score and credit reports

Start by figuring out where your credit stands. Knowing your score — and what’s in your credit reports — gives you a baseline to work from.

Checking your own credit score and reports does not damage your credit. You can check your credit score and reports for free through a number of reputable sources:

• AnnualCreditReport.com. Through this website authorized by the federal government, you can request free weekly credit reports from the three credit bureaus: Equifax, Experian and TransUnion. These reports do not include your credit score.
• Credit bureaus. The major credit bureaus offer free and paid-for credit scores. Read the fine print to make sure you aren’t accidentally signing up for a subscription service you don’t need.
• Nonprofit credit counselors. A credit counselor may be able to provide you with a free credit report and credit score and help you understand the finer details of your reports.
• Your bank or credit card provider. Many lenders and credit card issuers provide free credit score tracking. You may find this information on your monthly account statement or your online dashboard.

To protect yourself from identity theft, request credit information only from reputable sources.

2. Review your reports and dispute any errors

Once you have a copy of your credit reports, check them carefully for errors. Mistakes on credit reports are more common than you might think. A 2024 Consumer Reports study found that 44 percent of consumers have at least one error on their credit reports. Some errors can be harmless, like incorrect middle initials, but some can decrease your credit score.

Some common credit report errors to watch out for include:

• Accounts that don’t belong to you
• Closed accounts reported as open or open accounts reported as closed
• Incorrect credit limits or account balances
• Information from someone else’s credit report
• Payments wrongly reported as late or missed
• Your credit report mistakenly marks you as deceased

If you find an error, file a dispute with the credit bureau that issued the report. If the error appears on all three credit reports, you’ll need to contact each bureau individually.

The bureau typically has 30 days to review your claim. If they find a mistake, they’ll contact the company responsible to verify the information. Once the review is finished, the bureau must inform you of the results within five business days.

It’s a good idea to check your credit report for errors at least once a year, although you may want to do it more often if you plan to apply for a loan for a major purchase.

3. Establish positive financial habits to build good credit

You build strong credit over time. By focusing on key financial habits, you can steadily improve your score — and maintain it once you get there.

Pay on time, every time

Make payments on time, every time — your payment history makes up the largest chunk of your score. Even a single missed payment can stay on your report for up to seven years. Consider setting up automatic payments for all your accounts to avoid unintentionally missing payment deadlines.

Keep your credit utilization rate low

Your credit utilization — how much credit you’re using compared to our limit — can hurt your credit score if it exceeds 30 percent. Lower is better. For example, if your total credit limit is $5,000, aim to keep your balances under $1,500.

You can use a credit utilization calculator to see if you’re on track.

Think twice before closing old accounts

You may want to avoid closing any credit accounts you pay off.

Closing an account lowers your available credit, which could raise your credit utilization ratio if you have outstanding balances on other accounts. Old accounts can also help lengthen your credit history, which lenders like to see. Unless a card has a high annual fee or tempts you to overspend, consider keeping it open after paying it off.

Don’t take out credit you don’t need

Each credit application triggers a hard credit check, potentially lowering your score by up to five points and reducing your average account age. Opening a lot of new accounts in a short amount of time can be a red flag that makes lenders think you’re desperate to borrow money. To build credit good credit, only apply for credit when truly necessary and keep your credit shopping within a 15-day window so the hard credit checks aren’t counted separately.

4. Take strategic steps to establish new credit

Building credit can feel challenging, especially if you’re starting with a low score or no credit history. While your current score may give you fewer options than someone with an excellent score, it doesn’t mean you’re out of luck. Here are some low-risk ways to begin building.

Use a revolving credit card responsibly

A revolving credit card — especially when used independently — is one of the most effective tools for building or repairing your credit. It gives you the chance to demonstrate consistent on-time payments and low balances.

Ceizyk also warns, however, that “overusing” revolving credit is the fastest path to a lower score, in which case secured cards and credit builder loans are good options.

Consider a secured credit card

Secured credit cards may be a good option for people with little to no credit history or those looking to rebuild their credit. These cards require a cash deposit up front, which typically sets your credit limit. Once you’re approved, you can use your secured card just like a regular credit card and build your credit by consistently making on-time payments. You may be able to get your deposit back and convert your secured card to an unsecured one once your credit improves.

Look into a credit-builder loan

Credit-builder loans are offered by credit unions, small banks, online lenders and Community Development Financial Institutions (CFDIs).

If you have no credit history or a low credit score, a credit-builder loan may help you build a track record of responsible financial behavior without relying on a credit card. Unlike traditional loans, you don’t receive the money up front. Instead, the lender places the amount you “borrow” in a savings account or certificate of deposit (CD).

You make fixed monthly payments until the loan is fully paid off. Once you’ve made all the payments, you get access to the funds. This setup lets you build a track record of on-time payments, which can improve your credit score over time. However, because you only receive the funds at the end, it’s not a good option if you need quick access to cash.

Become an authorized user on someone else’s credit card

Ask a trusted friend or family member to add you as an authorized user on their credit card. The card owner’s positive credit history and responsible credit usage could help raise your credit score.

On the other hand, missed payments or overspending by either user will harm both peoples’ scores. Discuss how you’ll establish good habits or set spending limits. It’s also possible for them to add you as an authorized user without giving you the card or account access.

Open an account with a cosigner

A cosigner is a person with good credit who agrees to be legally responsible for a loan if the primary borrower doesn’t make payments as agreed. Their good credit may make it easier for you to qualify for a loan since the lender knows it has a backup source of repayment.

A cosigner shares full responsibility for the loan, which could impact their ability to qualify for other loans. So, be certain you can comfortably manage any loans you take on.

5. Don’t know where to start? Try credit counseling

If you’re feeling overwhelmed or unsure of your next step, consider working with a reputable credit repair company or credit counseling agency. Reputable credit counseling agencies can walk you through your credit report, help you set a budget and explore repayment options.

Some credit counseling agencies offer debt management plans (DMPs), where they negotiate with creditors on your behalf and consolidate payments into one monthly installment. These plans can sometimes lower your interest rates, waive fees, extend repayment terms and help you avoid missed payments.

To find trustworthy help, visit:

• National Foundation for Credit Counseling (NFCC)

• U.S. Department of Justice list of approved agencies

Bottom line

Improving your credit takes time, but it’s doable — and absolutely worth it. Start by reviewing your reports, correcting any errors and building healthy financial habits like on-time payments and low balances. With consistency, your score will improve, helping you unlock better rates and access more financial opportunities. And if you need help, credit counselors are there to guide you.