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    7 Steps to Help Rebuild Your Credit Score

    Credit scores.

    Let’s all take a moment to groan because this topic is, well, not fun — not fun at all. But it’s important. Why? Because our credit score carries so much weight in the world today. It’s kind of like it’s your credit score’s world, and you’re just living in it. Except that’s not really true, because we have control over it. Did you know that? 

    Though it might not feel like it all the time, we can negatively affect our score but we can also positively affect it — though it’s much harder and takes a lot more patience. So, let’s talk about how we can change the trajectory of our financial future. 

    Related: How to Rent a Home With A Bad Credit Score

    7 Steps to Rebuild Your Credit Score

    Credit Basics: How to Raise Your Credit Score

    What makes up your credit score?

    Your credit score isn’t a random calculation of your financial worthiness; there’s a method to the madness. So before you can start the process to rebuild your credit score, you need to understand what factors influence it so that you can focus your efforts in the right direction. 

    These are the key factors that make up your credit score. 

    • 35% — payment history. 
    • 30% — credit utilization. 
    • 15% — length of history.  
    • 10% — types of credit. 
    • 10% — new credit. 

    Where’s the issue? Do you have a history of late payments? Do you max out the limits on your credit cards? Do you open new credit cards often? 

    Download our free ebook, What to Know About Your Finances Before Buying a Home.

    7 Steps to Help You Rebuild Your Credit Score

    Closeup businesswoman hands holding white card sign with credit score text message isolated on grey wall office background. Retro instagram style image

    1) Dispute errors on your credit report.

    The first thing you need to do is take a careful look at your credit report. We’re all human, and there may be a mistake on yours. Thankfully, if you find one, the Federal Trade Commission (FTC) has a well-laid path for you to get it corrected. 

    • Step 1: Tell the credit reporting company, in writing, what information you think is inaccurate. Use the FTC's sample dispute letter. Include copies (NOT originals) of documents that support your position. 
    • Step 2: Tell the information provider (that is, the person, company, or organization that provides information about you to a credit reporting company), in writing, that you dispute an item in your credit report. Use this sample dispute letter.

    For more information on this process and what it requires, visit the FTC.

    2) Carry less than your limit on your credit card. 

    Since credit utilization makes up 30% of your credit score, the lower the balance of your credit card, the better — many follow the 30% rule. This means that you should spend up to 30% of your credit limit, but don't exceed it. Even if you make regular payments, the high credit balance can negatively affect your credit score since utilization is a key part of your overall score. 

    3) Increase your credit limit. 

    If you’re already spending well beyond 30% of your credit limit and are unable to make adjustments, then consider seeking out a higher limit so you can drop closer to the 30% sweet spot. 

    4) Pay your bills on time. 

    The best thing you can do for your credit score? Pay your bills on time. If this is something that you struggle with, there are a few tools available to help you create better habits. 

    • Set up auto-pay. Set up your bills, utilities, and credit lines to auto-pay so that your bills pay themselves in a sense! Skeptical about this method of payment? Set a reminder on your phone to check your bank accounts a day or two later to make sure that all went through okay. 
    • Use a financial calendar. Don’t mix business with pleasure. Create a finance only calendar where you can schedule payment days and set reminders. 
    • Account for processing time. Don’t forget that payments take time to process (especially if you use snail mail and checks!). Make your payment early enough so that if it takes 24-48 hours to process your payment, you’re still ahead of the due date. 

    Young couple calculating their domestic bills at home

    5) Become an authorized user on another account. 

    Have a family member or friend with outstanding credit? Although mixing family with personal finances isn’t always the best idea, becoming an authorized user can help raise your credit score. Plus, you don’t have to spend money or use the account to have your name associated with it. 

    6) Get on the phone with your creditor. 

    There’s a couple of things that hopping on the phone with your creditor can help accomplish.

    • Fix late payments. If you have a substantial history of making on-time payments, your creditor might be willing to waive the late fee and have the negative removed from your report. 
    • Clear outstanding collection accounts. Call them up and let your creditors know that you want to pay off your debt. Suggest paying in full and they might be willing to work with you. Just make sure that they agree to remove negative marks from your report!
    7) Pay off debt. 

    Get out of debt! There’s a wide scale to follow with getting out of debt. Dave Ramsey’s method tends to be the most aggressive. However, when followed, it’s known to be effective. 

    • Step 1: List your debts from smallest to largest, regardless of the interest rate.
    • Step 2: Make minimum payments on all your debts except the smallest.
    • Step 3: Pay as much as possible on your smallest debt.
    • Step 4: Repeat until each debt is paid in full.

    Just remember that paying off debt and rebuilding your credit score requires sacrifice and a lot of time (depending on how deep your debt goes). Set a plan and stick to it! It might be a good idea to let your friends and family know what you’re doing so they can provide support and accountability for you along the way.

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    Danielle Keech


    Danielle Keech

    Danielle is just like you — another down-to-earth military spouse learning every day how to navigate the craziness. As a mama of two, she knows what it takes to juggle solo parenting, a work-from-home career, and the demands of military life. She’s a firm believer that community is a key part of thriving and hopes to remind readers that they’re not alone through her writing. Want to connect? Find Danielle on Facebook, Instagram, Twitter, and LinkedIn.

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