- You cannot remove correctly reported negative information on your credit reports.
- Focus on building positive history on top of negative marks.
- Fixing your credit can save you money by earning you lower interest rates on borrowed money.
A good credit score gives you better financing options and lower interest rates. According to a 2024 study by the New York Federal Reserve, the number of Americans who were rejected for credit products has increased over time, and lower credit scores are to blame.
While there's no quick and easy solution, you can fix your credit by practicing diligence and patience.
How do credit scores work?
Before discussing how you can fix your credit score, you must understand how credit scoring models like FICO and VantageScore arrive at your credit score. Knowing how credit scores are calculated allows us to target specific areas and drop certain practices that aren't helpful.
These companies keep their algorithms away from public viewing, but we have a general idea of how credit scores are calculated. They break down accordingly:
| FICO | VantageScore |
| Payment history (35%) | Payment history (40%) |
| Credit balance (30%) | Length and type of credit (21%) |
| Length of credit history (15%) | Percent of credit used (20%) |
| New credit (10%) | Total debt and balances (11%) |
| Mix of credit accounts (10%) | Recent credit behavior and inquiries (5%) |
| Available credit (3%) |
How to fix your credit score
To be clear, the idea of fixing your credit might imply that you can reverse damaging marks on your credit report. Unfortunately, this is not possible. While you have the right to dispute any inaccurate information on your credit report, you cannot remove any accurately reported negative information yourself. This includes delinquencies and bankruptcies, for example.
If you've damaged your score in the past, the best thing you can do is wait for those marks to age off your credit report while you build positive credit on top of the negative information.
Step 1: Obtain and review your credit reports
You'll want to check all credit reports from the three major credit bureaus to get the full scope of your financial history.
You're entitled to a free credit report once every week from each of the major credit bureaus — Experian, Equifax, and TransUnion. You'll have to pay for additional credit reports or sign up for credit monitoring; some of the best credit monitoring services offer your full credit reports on a regular basis.
Information on your free credit report includes your payment history, outstanding debt, account type, date opened, credit limit or loan amount, and current balance.
How to access free credit reports
You can request free access to your credit reports online, by phone, or via mail.
- Online: AnnualCreditReport.com
- Phone: Speak to an operator for assistance by calling 877-322-8228.
- Mail: File an Annual Credit Report Request Form to have your credit reports delivered by mail. Then, mail the form to Annual Credit Report Request Service, PO Box 105281, Atlanta, Georgia 30348-5281.
Step 2: Dispute credit report errors
Review your credit report for incorrect details and dispute the false information immediately.
"One must get all or as many as possible negative items deleted. Even one late payment can drop a score 25-50 points or more. Multiple late payments and charge-offs can mean hundreds of lost points and a dismal score," says Daniel A. DeLiberty, consumer rights lawyer part of the National Association of Consumer Advocates (NACA) and owner of CreditLawyers.com.
Disputing errors on credit reports starts with submitting an appeal to the credit bureau with the inaccurate information. The Consumer Financial Protection Bureau (CFPB) offers detailed instructions on resolving an error on your credit report.
Pay down any credit card debt you have
If you have any late credit card payments, be sure to settle those immediately. Missed payments more than 30 days late will be reported to the credit bureaus, hurting your score. Their impact on your credit score worsens with every additional 30 days they remain late.
Payment history makes up 35% of your FICO score and 40% of your VantageScore. Settling those debts stops the bleeding, so your credit score doesn't get any worse due to outstanding late payments.
Step 3: Focus on payment history
Once you've stopped your credit score from getting any lower, you can start building a positive credit history. Your options are limited if you have a low credit score, but there are options nonetheless.
DeLiberty advises that you try to "piggyback" off a closer friend or family member's credit account as an authorized user. "You want to be added to an account with a perfect payment history, a long history, and a high limit," he says.
You can also apply for credit products designed for people with bad or no credit, such as a secured credit card or a credit builder loan. The best credit builder loans have low interest rates and payment terms between 24-48 months to help you build credit.
Because you're trying to drown out your negative marks with positive information, it's crucial that you make your payments on time. One way to ensure timely payments is to set a budget.
"If you're looking to improve your credit, start by mapping out your bills and making sure you have a plan to pay them on time," says Courtney Alev, a consumer advocate at Credit Karma. You can also put your bills on autopay, so you'll never have to worry about missing a monthly payment.
Ideally, you want to make your monthly payments in full, so you won't have to pay interest. However, making minimum payments on your accounts can help you maintain and even increase your credit score.
Step 4: Reduce credit utilization
Paying down your debts has the additional benefit of lowering your credit utilization ratio, the amount of credit you're currently using on revolving credit accounts compared to your total credit limit. While your utilization ratio is considered on your overall credit limit, your ratio also applies to each individual credit account.
"Keep it below 30%, or even better, below 10%," says DeLiberty. "While it's important to try to repair your credit, don't overlook active collections accounts and underlying debt that is likely the root cause of the credit problems."
Negotiations with your creditor
While it's true that you cannot remove accurately reported negative marks on your credit report, your creditors can. You can make use of this in two ways:
Goodwill adjustment letter: If you've had an otherwise solid payment history with a creditor, you can try sending a goodwill letter to your creditors. In this letter, you're asking your creditor to remove a late payment they reported to the credit bureaus.
You'll usually need a good reason for requesting this letter. For example, if your automatic payments failed for some reason or if you faced a temporary financial hardship. It's up to the creditors to decide if they grant the adjustment, but it's worth a try.
Pay for delete letter: Pay for delete letters are exactly what their name suggests: You're sending a letter negotiating an arrangement where you pay off your debt, and your creditor removes the delinquency from your credit report. These are under-the-table arrangements with no legal basis and as such, are often advised against.
Like goodwill adjustment letters, it's up to the creditor to agree to a pay for delete arrangement, and entirely up to them whether they honor the agreement even after you've settled your debt.
Step 5: Consider credit-building products
You might want to open a secured credit card or even a credit builder loan. These products help you establish an on-time payment history to counteract negative information on your credit report and, in time, will have a positive impact on your credit score.
If you're struggling to manage your debt and improve your credit score, you can outsource help from credit experts. (More on that below.)
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Step 6: Limit new credit inquiries
When you apply for new credit, lenders perform a hard inquiry on your credit report. One hard inquiry will only lower your score by a few points, but multiple inquiries will have a compounding effect. This is because multiple new accounts will cause lenders to wonder why you're taking so many loans out in a short period of time, calling your financial situation into question.
New credit can also lower your credit age since your credit history is calculated based on the average length of all your credit accounts and the age of your newest account.
There's no defined standard on how many credit cards you should have. However, experts recommend holding two to three credit accounts at a time.
Alev also recommends not closing your accounts, as having long-standing credit can positively impact your credit score. Additionally, it can help you offset the impact of your credit utilization. "By keeping the card open, you maintain a higher amount of credit extended to you, which helps you keep your credit utilization in check," she says.
Step 7: Monitor your credit
By monitoring your credit report regularly, you can see what lenders see when evaluating your applications. You can also identify areas for improvement and take steps to improve your credit score. You should never pay for your credit report — it's available once a week at AnnualCreditReport.com, although you don't typically need to check it that often.
Using credit repair and counseling services
If you need professional help with your credit, you have a few options:
Credit repair companies
Credit repair companies are third-party entities that claim to improve your credit score by working with the credit bureaus to remove inconsistencies from your account, usually for a fee.
In some instances, it may be nice to have a company advocating for you to the credit bureaus, given that they can be unresponsive to credit disputes filed by consumers. However, they aren't doing anything someone with the time and inclination couldn't do themselves.
If you decide to work with a credit repair company, be wary of potential credit repair scams. Malicious credit repair companies claim they can remove information (whether inaccurate or accurate) that keeps a consumer's credit score low.
By law, credit repair companies are required to accept payment only after services have been provided. Any credit repair companies that charge a substantial fee upfront are likely scams. The Federal Trade Commission (FTC) says these companies will accept your payment but never lower or settle the customer's debts in any way.
Credit counseling
A credit repair company exclusively offers inaccuracy mitigation in your credit report. With credit counseling, a professional will work with you to get a grip on your finances.
A credit counselor can help you manage your debt, offer educational tools, and help you repair your credit. A one-time consultation with a credit counseling agency is typically free. However, your credit counselor may suggest that you take on a debt management plan and offer ongoing services at a small fee.
In a debt negotiation plan, a credit counseling agency works with your creditors to negotiate terms with your creditor, such as lower interest rates or lower monthly payments in exchange for a longer payment term.
You can seek out a nonprofit credit counseling service, where services will either be free or at a much lower fee than for-profit credit counseling. Even if the consultation and financial education services (setting a budget, sorting out bills, and making a plan to pay off debt) are free, however, negotiating with creditors to reduce or eliminate debt will still typically come with a fee.
You can find a nonprofit credit counseling service at the NFCC.
Frequently asked questions about how to fix your credit
You should check your credit report at least once every year. Reviewing it more regularly can help you detect fraud and identity theft quickly and minimize damage.
The fastest way to repair your credit is by paying off any outstanding revolving debt as soon as possible. Then, consistently pay off your credit card balances in full every month.
Negative information, such as late payments, bankruptcies, and collections, remains on your credit report for 7-10 years depending on the type of information.
No, paying off collections cannot immediately improve your credit score. While paying off collections can positively impact your credit score, the best long-term improvement comes from on-time payment history and lowering credit utilization.
No, closing credit card accounts does not help fix your credit. Closing credit card accounts can actually hurt your credit score by increasing your credit utilization ratio and shortening the length of your credit history.
