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The Ultimate Guide on How to Quickly Rebuild & Fix Your Credit

The Ultimate Guide on How to Quickly Rebuild & Fix Your Credit

Your credit score is the most important factor when attempting to receive a loan or credit card. It is the main factor that is considered by the bank or loan issuer, and a low credit score can make it very difficult to obtain a loan or credit.

A low score can result in someone having a very difficult time being approved for a vehicle loan, mortgage, and a credit card. Rest assured, if you have a low or damaged credit score, there are many ways to rebuild your credit score, although it will take some time.

This article will outline ALL the different ways you can quickly rebuild your credit to improve your financial status.

Note that when it comes to repairing your credit, there is a process to follow and it can take several years to achieve ‘good’ credit. This is not something you can pull off overnight or over a couple weeks (short of finding some serious errors on your credit report and having them removed). So while we give you the best way to quickly rebuild your credit, understand that you are in this for the long haul, over the next couple years (though it’s possible to move from bad credit to fair credit in about a year to a year and a half…moving from bad credit to good credit will take at least a couple years). This is how long it may take to get good credit!

Know What the Credit Scores Mean

The Fico Credit Score Breakdown

First, it is important to know how your credit score is classified. It is determined by a number, with your number being used to gauge how well you are when it comes to handling debt. The following displays the limits used when determine a credit score.

Below 620:Poor

If you have a credit score below 620, most loan issuers will not even consider you for a loan at all. A credit score this low is a result of very poor debt management such as delinquencies, missed payments, late payments and more. If you have credit this poor, it is best to apply for a secured credit card, and consolidate your debt into one loan to help pay down your existing debt.

620-680- Fair

If you have a score in the fair range, you might be able to receive credit or loans, although it could depend on many other factors, and could result in paying a higher interest rate then normal. If you have a fair credit score you can apply for a secured credit card if needed, or you can simply change your habits based on the reason you have this score.

680-720- average/good

If your score is in the average to good area, you have a decent chance to receive credit although again, it will depend on other factors such as income, especially for large loans such as a vehicle loan. Furthermore, with a score int his range, it might be difficult to qualify for credit cards that pay a high rewards rate along with an annal fee, such as travel reward credit cards.

720-760- very good

If your score is very good, you will not have a difficult time receiving loans or credit, although it still could be tough to qualify for elite level credit cards such as travel rewards credit cards which only accept applicants with an excellent credit score.

760-850 excellent

If you have an excellent credit score you will have a easy time receiving any credit or debt that you apply for, and should receive very good interest rates, especially on credit cards.

We recommend your read our detailed article about how your credit score is determined.

Know Which Financial Area To Improve

You can’t fight a battle or win a war if you don’t know what moves your enemy has made. In the context of repairing your credit, you need to find out what past actions you’ve done that are currently damaging your credit score. That means knowing exactly what your current credit score is and looking at your full credit report, to see what’s negatively impacting it. Once you know what’s affecting it, you can then take the necessary steps to fix those.

Many people do not even think to look over their credit report, causing them to miss important information required to fix their credit score. In order to rebuild your credit, it is valuable to know why you have a low, or damaged credit score in the first place. You are entitled to receive your credit report for free once a year from any of the three main credit bureaus, which are Equifax, Experian, and

You are entitled to receive your credit report for free once a year from any of the three main credit bureaus, which are Equifax, Experian, and TransUnion. These three bureaus manage your credit which is called FICO credit score.

You can find your credit score by visiting Credit Sesame which gives you free access to your credit report, or by contacting any of the three credit bureaus directly. Do not pay a website to find out your credit score.

When looking at your credit report, take note of the reasons it is low, which can be as a result of any of the following:

  • late payments
  • missed payments
  • delinquencies
  • large amounts owing
  • high debt utilization
  • high number of credit inquiries
  • debt loads gone to a collection agency

Once you know why, you can begin to repair your credit by taking the proper course action. Also read it over carefully, and look for any possible errors, although rare, there can be a mistake which is the reason for your low credit score.

 Change Your Spending Habits

Many times, careless spending, as well as inefficient saving can be the cause for missing payments, or not making the minimum payment required. You have to change your spending habits and patterns, which will ultimately help you consistently have funds available as time goes on.

Set aside money to increase your savings so you can easily afford all your payments. This can be done by setting up an automatic transfer with your financial institution. An automatic transfer will transfer a set amount of money either each week, bi weekly or monthly to a separate account.

You can set it as low as you want, depending on how much you afford. For example, if you set up an automatic transfer for an amount of $50 bi-weekly, you will save $100 a month, which you can use to help with your loan or credit card payments. Remember to spend within your means at all times. Think of it as a separate saving account that you will use to ensure that you make your payments easily and efficiently, while rebuilding and maintaining your credit score.

Furthermore, a good way to change your spending habits is to create a monthly or weekly budget for yourself, and keep track your all expenses. Be disciplined and do not go over your monthly budget. Doing this will allow you to have the cash available that is needed to make your credit card payments.

Practicing good financial habits, alone, will over time improve your credit.

14 Ways How to Improve Your Credit History

Below is a detailed action plan to take so you can fix your low, or damaged credit score over time. These are all actionable steps you can take that will increase your credit score. Make sure you check your credit score and have a copy of your credit report first though. You can’t properly fix your credit if you’ve got a credit report saying you owe different institutions money.

 1. Get a copy of your credit report.

You can’t even begin if you don’t have a copy of your credit report. So get it. Go to sign up with Credit Sesame to check your credit for free (yes, it is free and you don’t need to put in a credit card number) or look at Credit Karma.

Both don’t charge you a cent.

2. Look For Errors In Your Credit Report & Dispute Them

When examining your credit report, take a close look for any possible errors as this could cause a misunderstanding, and as a result, it could be the reason your credit score is low. Some of the areas to look for any errors include income, length of employment and any other personal or employment information. Even incorrect or missing personal information can result in miscommunication.

If you find an error contact the credit bureau and notify them of the error. You might need to provide some proof, especially if something such as your income is incorrect, in order to change the error. A simple thing like this could be the reason for your low credit score, and can be fixed very quickly.

Disputing Your Credit Score – How

If you find errors or disagree with something on your credit score, you can dispute it with the credit bureau. You can dispute any errors or information online, by visiting the credit bureaus website. Credit bureaus by law are not required to fix any errors on your credit report, unless you notify them that there is an error. However, under the Fair Reporting Credit Act, the credit bureaus are required by law to investigate and respond to your request within 30 days. Fixing an error can give your credit score at least a 25 point or higher jump in your credit score, which can make a very big difference.

When you dispute an item on your credit score, ensure that you have copies of any documents to support your claim, which will help confirm the incorrect information on your credit report.

3. Pay Off Amount Owed in Full then Ask For Items To Be Removed 

Many people don’t realize that you can negotiate with the credit issuer to remove an item from your credit report. This is especially the case if you have a collections item on the public sections of your credit report. If you have the funds, you can pay of the entire collections amount, then request that the collections item be removed from your report. A collections item might include any unpaid cell phone bills, utility, bills etc. that weren’t originally a credit item. Many times the credit issuer will accept your request and remove the collections item. This can really revive your credit score quickly.

Again, this involves PAYING off the amount in full first.

4. Catch Up On Late/Missed/Owed Payments

Assuming you’ve taken a look at your credit report, mark down to what institutions you owe money. You need to pay what you owe or work out a payment plan. This is the first step you need to take to improve your score.

Your payment history makes up 35% of your credit score, so this is an important area to focus on. Lenders, such as banks and credit card issues want to know how reliable you are when it comes to paying your bills on time. They will be able to view every late payment that you made and how late it was made. The later the payment is made, the more negatively it will effect your credit score.

If your score is low to due damaged or missed payments, there are a few things you can do to fix this problem.

First, if you have the available funds to fix this problem, catch up on any late payments and ensure you do not miss any future payments, doing so will allow your credit score to slowly increase over time, although it will take a minimum of six months to see your credit score increase. An effective method that will eliminate any late payments is to set up a recurring payment that automatically takes the payment from your bank account. Most credit cards allow you to do this online.

Second, if you do not have a good amount of funds available to catch up on payments owed, contact your credit issuer, whether it be your financial institution or credit card company and set up a payment plan. Explain your situation, and they will help you work out a structured payment plan. Doing so shows that you are fully obliged to catch up and pay down your debts, and they will be happy to help you — they are, after all, getting money out of you.

5. Consolidate Your Debt If You Have Different Loan Products

If you have several different debt loads that are causing your low credit score, such as car loans, lines of credit, and a few different credit cards, then you should contact your financial institution to create a debt consolidation loan.

A debt consolidation loan allows you to combine all your different debts into one debt load to simplify the payments process, and most importantly it allows you to pay a lower amount of interest. The lower interest is key to paying your debt loads off quicker, as you will not be paying interest on multiple debt loads.

The main advantages of a debt consolidation loan are as follows:

  • there is only one monthly payment to keep track of
  • you will pay a lower interest rate, which will save you money
  • your debt will be paid off in a specified amount of time

You can get a debt consolidation loan at your financial institution, or by seeking a credit counsellor separately. Many times it is easier to contact your financial institution, as there is no fee to sit down and discuss it with your institution’s loan officer. Similar to any other loan, there are varying factors that decide whether you will qualify for a debt consolidation loan, as well as the interest rate you will pay.

If you have a good income, then you will easily qualify for the loan, and pay a lower interest rate than you would have otherwise, paying each loan product separately.

6. Regularly Pay Down Balances Close To Credit Limit

The amount of credit you have used, known as your debt utilization, is the second largest factor considered when determining your credit score. The amount you owe in comparison to your credit limit makes up for 30% of your credit score. It measures how much debt you have in correlation with your credit limits. For example if you have a $10 000 credit limit on your credit card, and you have a $5000 balance, then your debt utilization is 50%.

If your credit score is low because of a high debt utilization rate, then pay down your balances. Many people do not know this is such a large factor when determining their credit score, therefore their credit score plummets. There is a rule of thumb known as the 30% rule. This rule specifies that you should only use 30% or less of your available credit at any given time. For example, if your credit limit is $1000, you should only be using $300 or less of your credit. If you are using anything above that, it usually will decrease your credit score. Pay down your debt, and keep it lower then 30% and you should see your credit limit increase over a period of time.

A good trick that you can use is, is ask your credit card issuer if you qualify for a credit limit increase, which would lower you debt utilization. For example, if you have a present limit of $3000 and owe $1700, you have used over 55% of your available credit, which will have a negative impact. However, if you increase your credit limit to $5500 you would only be using about just under 30% of your available credit. Be cautious, as this requires good self control, as you could be tempted to accumulate more debt because of the increased limit.

7. Reduce Your Number Of Credit Inquiries

The number of times you have had your credit score inquired by a financial institution or credit card company factors into your credit score. It has a weighting of 10% of your total credit score

If you have had your credit checked to many times, you are viewed as desperate to obtain credit, as it shows you do not have enough cash flow to pay down your existing credit. This is another factor where many people do not realize that it can negatively effect their credit score, therefore they continue to decrease it because they are not aware. If this is the case do not apply for any credit for at least six months to a year and you will see your credit score increase. This includes any loans and credit cards, as well as lines of credit. Unfortunately, this is all you can do if this is the reason your score is low, so patience is definitely needed.

8. Pay More Then Minimum Payment Required

An old trick but an effective one still.

Every credit card bill requires a minimum payment that must be paid for that billing cycle. The minimum payment can be considered as a trap, as it results in you paying more interest as your debt fails to decrease. If you only make the minimum payment on your bills, you will technically never pay off your balance because of the interest.

Also, only making the minimum payment on your bills will cause your credit score to fall. Many people do not realize this, and they are unknowingly hurting their credit score. It is fine to only make the minimum payment once in a while if your are having a tough month financially, but do not do it regularly.

9. Avoid Closing Credit Cards

Closing a credit card can result in a lower credit score. This is because it is viewed as you having lost control of payments and inefficient use of credit. The longer your credit history is the better your score will be so, if you really need to cancel a credit card, ensure that you cancel the most recent cards. Also, closing a credit card will lower your available credit limit, which is not good for your credit score, and your debt utilization.

An effective way to keep your card active is to set up automatic recurring payments, similar to your utility bills etc. This will ensure that payments are made to keep your card active. If you have a credit card with no balance, you should still use it a few times per month and make the payments to keep your credit active. If you do not have any recent active credit, it can actually hurt you credit score, as the credit issuers will not be able to see how you are currently managing your credit.

10. Time Your Bill Payments

It is best to make two payments per month on your credit card, instead of the usual one payment per month. Most people only make a payment once a month which can have a negative effect on your score. This has a negative effect because the balance on your credit is reported in the form of a snapshot in time. So on the same day every month your credit snapshot is taken. It can work against you, as it can create a false impression that you are carrying a high balance when technically you are not. For example if your balance is $1500 on a $3000 limit, and you pay it off the day after the snapshot is taken, each month it will appear as if you are carrying a 50% balance.

To get around this find out when the credit snapshot is taken and pay a good portion of the balance before then. For example if your limit is $3000 and your sitting at a $1500 balance, then paying a good $600 dollars before the snapshot is taken, will show that you are only using the 30% of your limit.

11. Get A Secured Credit Card

If you have a really low or damaged credit score — have no loan products that you can prove good payment history with — and want to improve your credit, the best way to repair it is to apply for a secured credit card.

A secured credit card allows you to make a deposit, which will usually be your credit limit, and in return you get to use the credit card like any other credit card. The deposit limits can be really low, with some starting as low as $200 and can be as high as $10 000 depending on the card.

For example, you can easily get a card like Open Sky Secured Visa Credit Card, even with bad credit AND use this to help fix your credit (not to mention having a proper credit card to use).

It is a lot easier to qualify for a credit card as many times all you need is your monthly income to exceed your monthly expenses. In fact, some secured cards do not even run a credit check at all. There are different secured credit cards to meet different needs, some are designed for people applying for credit for the first time and some are designed specifically for damaged credit.

How long will it take using a secured credit card before your credit improves enough to get an unsecured credit card?

This varies, but typically between 12 to 18 months of making payments regularly you can automatically be upgraded to a normal, non secured credit card.  It can’t hurt to at least ask if you can be upgraded, but only do so if you have made all your payments on time, and have kept a low balance.

Some of the interest rates can be higher then a normal credit card, however it varies.

Below are some of the best secured credit cards which will allow you to qualify with bad credit, as well as upgrade to a non secured card if used responsibly.

Note, we recommend you check our comprehensive best secured credit cards for more specific recommendations.

If you can’t get a secured card but need a credit card to use or just to improve your credit with, you can look at the next suggestion.

Recommendation 1: Open Sky Secured Visa Credit Card

Standout Feature: this card does not run a credit check, making it easy for individuals with very bad credit to qualify


  • this card does not run any sort of credit check, and does not require a checking or savings account to qualify
  • card has an affordable fee of $35
  • regularly reports to 3 major credit bureaus
  • your credit limit is the amount of your deposit
  • variable A.P.R. at 17.99%


  • very easy to qualify(often in same day you apply)
  • great for someone with damaged credit


  • has an annual fee
  • usually you cannot upgrade to a non secured credit card

Is this card right for me?

  • This card is ideal if you have damaged credit, or or recovering from a bankruptcy, as your credit score is not reviewed when applying, and it does not require you to have a checking or savings account like most other secured credit cards.
  • You could also use this card if you are building credit for the first time.

Recommendation 2: Wells Fargo Secured Visa Credit Card

Standout feature: it allows you to have a large credit limit of up to $10 000


  • your credit limit is based on the amount that you deposit, and can range anywhere from $300 to $10 000
  • does not charge any penalty A.P.R.
  • regularly reports to 3 major credit bureaus
  • regular A.P.R. is 18.99%


  • this card allows you to move onto a non secured credit card if payments are made regularly
  • no penalty A.P.R.
  • high credit limit based on deposit


  • at times it can be difficult to qualify if you have a variety of reasons for bad credit
  • has an annual fee although it is only $25

Is this card right for me?

  • This card is ideal if you have a lot of cash for the high credit limit, but with a poor credit rating, as it can increase your credit score by a wide margin if used responsibly. Also it also provides the opportunity to upgrade to a non secured credit card.

12.Become an Authorized User on Someone Else’s Card

If you need a credit card and you want to rebuild / build your credit, this is one option if you can’t get a regular card because of your bad credit and are unable or unwilling to get a secured credit card. The key difference here is that someone else’s good financial behavior builds YOUR credit up.

The method of becoming an authorized user works by asking someone such as a spouse, or family member to allow you to become an authorized user on their credit card account.

This can ultimately result in an increase to your credit score when you make consistent payments every month on the card (assuming you are using it).

Although both names are on the credit account, the main user is still the primary individual who is responsible for the debt load. This is where it becomes an effective method as you are not fully responsible for the debt payment, and you can still increase your credit score as long as you, and the primary user, use the card effectively by making payments on time and keeping the balance low.

This means you can make purchases with the credit card, without being the primary user. As an authorized user you aren’t responsible for the purchases, however all your information will show up on your credit report allowing you to improve your score.

To recap, there are two ways here how to use this:

  1. your name is added but you don’t use the card. The primary user will make payments as regular, but you will get the credit building benefit of this
  2. your name is added and you use the card. You will be using this card like a normal card, and this means you need to make payments. This will improve your credit. However, if you mess up and miss payments, you may hurt both your credit and the other person’s.

13. Apply For Installment Loans

The type of loans you have also have an impact on your credit score, as it has a weight factor of 10%, when determining your total credit score. Loan issuers like to see that you have the ability to pay off different types of credit. This includes any vehicle loans, lines of credit, or any other loans.

An installment loan is a loan where you have a set payment, along with a set time period for these payments, along with a time period in which the loan will be completely paid. Car loans, and vehicle loans are examples of installment loans. Once you exemplify that you can make regular payments on the installment loans, it will increase your credit score.

Applying for installment loans is only recommended for individuals who have enough cash flow, or adequate income to be able to make the payments on other loans. If you don’t think you can handle other loans, do not apply for any as you could dig yourself into a deeper hole.

14. Apply for Bankruptcy (the last resort)

This is usually a last resort option, and is the slowest way to rebuild your credit. Declaring bankruptcy is only ever recommended if you are drowning in debt and are simply unable to repay it. In this situation, your credit will be bad anyways and, because of the debt, you won’t be able to pay off that debt and fix your credit. You are basically in a hole with no way out because of the debt and MUST pursue bankruptcy to climb out of that hole.

Keep in mind that Bankruptcy has a huge impact on your future credit rating. Unlike other credit report marks, bankruptcy will stay on between 7 to 10 years on your credit report before it falls off (depending on what type of Bankrupt you declare). If there is any way to pay your debts down without bankruptcy, you will be able to FIX your credit faster (a couple years) than having Bankruptcy on your report.

You should only choose bankruptcy if a credit counselor or your financial institution informed you that this is your only option. SO do YOUR DUE DILIGENCE FIRST.

The Final Word on Fixing Your Credit

It is important there is no quick fix that will improve your credit score overnight. The only thing that can change your credit rating immediately is if there was an error on your credit report.

If a debt consolation company tells you that they can fix your credit score by paying them a fee do not follow through with it. Anything a credit repair company can do legally, you can also do for yourself for free or a minimal fee.

The facts, are it takes time as you have to demonstrate that you can effectively pay credit. Understand that it will take a minimum of 60-90 days to see any improvement on your credit score.

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In conclusion, remember patience is key to repairing your credit score. To sum it all up, find out the reason for your low credit and take the necessary action by following the steps discussed in this article. Your goal should be to at least achieve a credit score of  700, and slowly try to increase it over time. Repairing and maintaining your credit score will result in lower interest rates, which can save you thousands of dollars in interest over time.

About The Author

Ben Todd

Ben was a seriously broke graduate student with bad credit who after finding himself rejected for any sort of credit card or loan for most of his adult life, finally decided to get his financial life in order. ' He spent several years reading as many financial advice books and blogs as he could. And suprisingly, Ben found he actually LIKED the topic of personal finance; after fixing his own finances, starting his own successful work at home website business, and using his earnings to get out of debt, created to help others do likewise!

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