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You Can Repair Your Own Credit: Here's How

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Do you have bad credit and have no idea where to start the repair process? Perhaps your student loans and some credit card debt feel like too much to handle? If you are worried that the major credit bureaus stand between you and a bright future of success and creditworthiness, there are steps you can take to fix your credit and get out of having a bad credit score.

The fix will not be overnight, but there are certainly opportunities to improve your credit score through paying your bills on time, consolidating your credit, lowering your credit card balances, taking out a personal loan or using a secured credit card, never missing payments, and correcting any misinformation that may be marring your credit report.

Indeed, consumer complaints about credit reporting are at an all-time high. A 2020 report by U.S. PIRG Education Fund stated that the Consumer Financial Protection Bureau (CFPB) published more than 282,000 complaints in that category, double the previous year.

Clearly, errors on credit reports are both common and vexing.

If you think there may be a mistake in your credit report, you can do more than complain. You can work to fix it.

The first thing to do is steer clear of any for-profit credit repair services. These third-party services offer to increase credit scores for a fee. In 2020, the CFPB received 1,000 complaints about credit repair services, according to its latest Consumer Response Annual Report.

Perhaps most importantly, anything a credit repair service promises, you can do yourself at no cost. "I've seen credit repair firms charge as much as $1,000 per account, and all they're doing is what you can do for free," says Rod Griffin, senior director of public education and advocacy at Experian, one of the three major credit reporting agencies, also known as credit bureaus.

Credit Repair: The Warning Signs

If you still want to consider using a service that promises to increase your credit score for a fee, the Federal Trade Commission suggests watching out for warning signs, such as being asked for an upfront payment. This is illegal, according to the federal Credit Repair Organizations Act. Also be wary of someone who overpromises, such as guaranteeing to remove bankruptcies or foreclosures from a report.

Before signing anything, check the CFPB's complaint database to see if anyone has reported problems with the credit repair service, advises Bruce McClary, senior vice president of communications with the Washington, D.C.-based National Foundation for Credit Counseling, an association of nonprofit financial education organizations. And, if you have already signed an agreement, you have up to three business days to back out of it, according to the CFPB.

How to Repair Credit by Doing It Yourself

For most people, the best advice on how to repair credit is to simply do it yourself. "You're your own best advocate in this kind of situation," says April Lewis-Parks, director of education and corporate communications for Consolidated Credit, a nonprofit credit counselor in Fort Lauderdale, Florida.

Griffin says that credit reporting agencies welcome corrections, and the process is not difficult to complete.

"People are very successful."
– Rod Griffin

Senior Director of Public Education and Advocacy at Experian

See for yourself. Start by requesting a copy of your credit report from each of the major credit reporting agencies: Equifax, Experian and TransUnion. Every consumer is entitled to receive one free report from each agency every 12 months. You can request your report at, or call 1-877-322-8228. You also can get a free report any time you are denied credit or have another adverse event due to a credit report.

Scan the report for mistakes. Look for accounts you have paid off that still show as unpaid, or transactions you didn't make. If you find an error, contact the credit reporting agency and explain the situation. Include copies of documents such as statements or receipts. You can do this by mail, and Equifax, Experian and TransUnion all offer free web services for disputing information.

Within 30 days, the credit reporting agency must forward your information to the creditor that submitted the original item. The creditor must then investigate and report back to the credit reporting agency. Inaccurate information must be corrected, and whether or not a correction is made, the credit reporting agency has to tell you in writing what happened.

The Limits of Credit Repair

There are limits to what you can do when it comes to cleaning up your credit report. A credit reporting agency can't remove accurate and timely information, even when it's negative.

If you are unable to demonstrate that a negative item is in error, you'll have to wait for it to drop off your report, which can take some time. A late payment may stay on your credit report for up to seven years; a Chapter 7 bankruptcy stays on for 10 years. Some new scoring systems will remove paid accounts that include negative information from your report, according to Griffin, but for now, credit repair is a long game.

If you can't get a negative item removed, you can still improve your credit by making all future payments as scheduled. Seeing this improvement takes time, but it is worth the effort.

"A good credit history and good credit score will save you a lot of money in interest or fees you'd pay to access credit," Griffin says. "So rehabilitating and managing your credit history is a very valuable financial step to take to make sure your financial well-being improves."

So, what do you do next? Build your credit! First up is understanding how your credit score is determined and how you can make those three digits work to your advantage.

Factors That Positively Affect Your Credit Score

The way credit scores are calculated used to be something of a mystery. Not anymore. These days, the basic components of a score are well known, as is the relative importance of each. Here's an overview of how your score is determined – and how you can focus on areas that may need improvement.

Timely payments. Your payment history weighs more heavily than anything when it comes to your credit score. Understandably, your record of paying back debts means a lot to lenders. Payment history counts for 35% of a score calculated by the FICO credit scoring agency.

Missing or being late on a single payment can noticeably lower your score.

Controlled credit usage – aka credit utilization. Credit utilization or usage is a percentage figure that shows how much you are using of the total credit available to you. Credit usage explains 30% of a FICO score. To figure it out, add up the balances on your credit cards and similar revolving credit accounts. Then divide that number by your total credit limits. Maintaining a ratio that is under 30% is the target.

Credit history. Lenders want to see that you are capable of building and maintaining a responsible credit profile. Some of the most damaging things you can have in your credit history are records of filing for bankruptcy, foreclosing on a home, getting a car repossessed, or having a debt charged off by a lender as uncollectible. Failing to pay back money you borrowed can seriously damage your credit score. And these events stay on your credit history for years.

Credit inquiries. The number of inquiries on your report is another piece of the puzzle. If your report shows a lot of inquiries from lenders in a short time – as in, it looks like you're applying for numerous credit cards and/or loans – it can temporarily push down your score. To avoid this, don't apply for several credit cards or other loans within a short period.

Ways to Build Your Credit – and Your Score

Now that you understand the ins and outs of credit repair, what goes into your score, and how to move forward, you may still be stumped, especially if you've struggled in the past to even establish credit. If so, here are some next steps to consider.

Use a Secured Credit Card

If your credit score gets knocked down too low, or if you've never borrowed money so you have a limited or no credit history, you may find it difficult to get a loan or line of credit. One way to repair your credit when this happens is to apply for a secured credit card.

To qualify for a secured card like a First Horizon Secured Visa, you will need to first deposit cash in a savings account. The amount of cash in the savings account determines your credit limit. Many lenders offer secured credit cards, but most work the same way. After charging purchases on your secured card for a while and making the monthly payments on time, you'll have a credit history. Then you should find it easier to get an unsecured credit card or other loan.

Apply for a Secured Loan

Another way to improve or build up your credit history is with a loan secured by collateral. A good example of this is a First Horizon Auto Loan, since the vehicle will serve as the collateral that secures the loan. Borrowers who are not eligible for an unsecured loan may be able to qualify for a secured loan.

Personal loans such as a First Horizon Personal Installment Loan may also be secured or unsecured. These loans can be used for any purpose, including purchasing a boat or recreational vehicle, paying for a wedding, or even funding a vacation.

Sign Up for Credit Monitoring

Credit monitoring is a service you can buy from credit watch companies. For a fee, they will keep an eye on the reports of your credit activity kept at the big credit bureaus.

Anytime a lender reports a new account opening or inquiries about your credit history, the credit monitor will notify you. This can stop someone else from obtaining credit in your name.

Repair and Rebound

Repairing your credit is a job many borrowers can do on their own. It takes time and attention. But the benefits of good credit, including more access to credit and lower borrowing costs, make it a task well worth doing.