1. Figure out where you stand
First Step is to check your credit score to see where you stand. See complete ranges of credit score in our Blog post “Your Credit Score: How Much Has It Changed?”
FICO, use information from credit reports to rank consumers by a number ranging from 300 to 850. The exact number can change on a monthly basis, and can be surprisingly volatile
2. If you find errors, dispute them
Credit report mistakes are common. 15% of consumers have an error on at least one of their credit reports. Don’t lose heart if you find any mistakes; it’s very common and can be solved!. Check our Guide on how to solve dispute of credit report error
3. Pay all bills on time going forward
The two main components of your credit score are your payment history and the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as many as 10 years, can significantly lower your score. It’s never a good idea to take on more credit than you can handle.
Late payments work against you. It’s extremely important to pay bills on time, even if it’s only the monthly payment.
Even if paying down a small balance doesn’t affect your score right away, it will give you a sense of accomplishment. Additionally, paying a little at a time is still progress towards your end goal.
4. Pay down credit card balances
Pay at least the minimum on every card, more if you can afford it, but never lose sight of the account charging you the highest interest rate. Reducing that balance will cut your debt and that will give you a better shot at improving your credit score.
5. Don’t apply for new credit
Each time you apply for credit, the lender will request a copy of your credit history. The lender’s request then appears as an inquiry on your credit report. Too many inquiries in a short amount of time could be viewed negatively by a potential lender, because it may indicate that you have a history of being turned down for loans or have access to too much credit.
If you see any errors, dispute them with the credit bureaus. Then, focus on paying down any credit card debt while making every bill payment on time. In the meantime, do not apply for new credit. Basically, in order to repair your credit, you will need to limit your use of credit.