Credit Repair: How To Fix Bad Credit On Your Own In 6 Steps
Don't fall for scams promising easy, overnight credit repair. If you want to fix your poor credit, you can (and should) do it yourself. Follow these six simple steps to do-it-yourself credit repair.

If you’ve had an overdue student loan, years of high credit card balances, collections accounts, or even a foreclosure, unfortunately, you probably have below-average or bad credit.

With poor credit, you may not be able to get approved for new credit products like credit cards. Although you may still be able to take out an paying over $200,000 more in unnecessary interest just because of bad credit.

The good news is—as you should know if you’ve read Money Under 30 for a while—that you can repair your credit score all on your own. It just requires a little bit of know-how and a good bit of patience. Here are six steps towards building better credit.

Improve your credit; it’s completely free with Experian Boost

Build your credit history while you save with Self

1. Figure out where you stand

Before you begin do-it-yourself credit repair, you’ll want to get copies of your full credit reports from all three bureaus (Experian, TransUnion, and Equifax).

You can get your reports truly free, once a year, at or by calling 1-877-322-8228. Other websites may claim to offer free reports, but the Federal Trade Commission (FTC) warns that these offers are often deceptive.

You can also try free credit score tracking apps Credit Karma or Credit Sesame to get a sense of where you stand.

Credit scores range from 300 to 850. A score of between 700 and 740, depending on the scoring method used, is considered “good credit” and usually enough to qualify you for the best credit cards and lowest mortgage rates.

Related: How Credit Works: Understanding Your Report And Score

2. If you find errors, dispute them

The next step in credit repair is to dispute incorrect information on your credit report.

Errors aren’t common, but they happen. Of course, sometimes bad credit is just your fault. You shouldn’t try to argue accurate information, but if you do see errors–even small ones—it’s worth cleaning them up. Here’s how:

Once you have the copy of your full credit report in hand, check your identity information (Social Security number, spelling of your name and address), and credit history.

Review the list of credit cards, outstanding debts, and major purchases. If you see any mistakes or questionable items, make a copy of the report and highlight the error.

Next, gather any information that you have to back you up, such as bank account statements, and make copies of these as well. This is important! The credit bureaus won’t do anything without proof.

Write a letter to the specific credit reporting agency that shows the falsehood, whether it is Experian, Equifax, or TransUnion. Explain the mistake and include a copy of the highlighted report along with your documentation. Although certain bureaus now let you submit disputes online, it’s not a bad idea to send this letter by certified mail, and keep a copy for yourself. The reporting agency has 30 days from the receipt of your letter to respond. The Federal Trade Commission provides advice on contacting the credit bureaus about discrepancies. Here are the contact numbers and web sites for the three credit bureaus:

  • Experian: 1-888-397-3742 –
  • TransUnion: 1-800-916-8800 –
  • Equifax: 800-685-1111 –

3. Stop the bleeding

Once you deal with any errors on your credit report, it’s time to ensure you’re not still spending more than you can afford each month.

Why is this so important? It’s because are only three simple things to do to repair bad credit:

  1. Pay all of your bills on time
  2. Pay down debt (especially credit card debt)
  3. Avoid applying for credit

But before you can do these things, you need to make sure you’re not spending more than you earn—you need a budget.

To start, review your tax returns for the past two years to get a sense of how much money you actually take app德扑圈官方网址home in a year.

Subtract your regular monthly expenses (rent or mortgage, car payments, and app德扑圈官方网址home, car and health insurance) from your current income.

Next, estimate your monthly spending habits for other expenses such as gas, groceries and entertainment. Create a limit, based on your income, of what you can spend in each of the different categories of expenses. For example, if you tend to spend $400 a month on groceries, try to stick to $300 a month on groceries by making changes like buying generic brands, using coupons, and resisting impulse purchases.

4. Pay all bills on time going forward

If you want to fix bad credit, you need to start paying all of your monthly bills on time, period!

If you’re behind on any bill, get caught up as soon as you can. On-time payments are the single most important factor to your credit score. Simply put, your credit won’t improve until you can consistently pay every bill on time.

One downside of this is that you don’t get credit for basic bills like your monthly phone and utilities. Experian Boost can help with that. The free service links your bank account to Experian to monitor your monthly payments. On average, customers have enjoyed a 13-point FICO score increase using this service.

5. Pay down credit card balances

Take charge of your credit cards by paying down their balances.

If you have any outstanding balances, make room in your budget to pay down these debts bit by bit, every month until they are gone.

Know your credit limits and make every effort to stay well under the maximum when charging items.

That’s because credit bureaus analyze your debt load as a ratio. If you charge $500 on a card which has a $1,500 limit, you’ve used 33%, which is better for your credit score than charging the same amount on a card which has a $1,000 limit (50%), both of which are better than being maxed out (100%).

Related: Big Fat Guide to Getting Out of Debt

Pay these credit cards down, but don’t cancel them. The total amount of available credit affects your score, even if you owe nothing.

6. Don’t apply for new credit

Finally, resist the temptation to open a new credit card, even when a store offers a discount on your purchase for doing so.

Each time you apply for credit is listed on your credit report as a “hard inquiry” and if you have too many within two years, your credit score will suffer. In general, a consumer with good credit can apply for credit a few times each year before it begins to affect their credit score. If you’re already starting with below-average credit, however, these inquiries may have more of an impact on your score and delay your ultimate goal of watching your credit score climb.

Do-It-Yourself Credit Repair: Fix Bad Credit On Your Own In 6 Easy Steps - Self

When the dust settles, consider a unique way to build your credit like Self.  Self offers four different types of loans, each which you pay down monthly.  At the end of the term, Self sends you back the initial term of the loan, minus interest and a small application fee.  Each month you make a payment, they’ll report to good behavior to the credit bureaus and you’re credit score and profile will likely improve.  The initial application may drop your credit score, but if you make all payments (to yourself) on-time, it should increase.

Experian Boost™ is another way for people with a poor or limited credit history to get ahead. Many times, these people will have a positive, consistent record of paying utilities on time, but those payments aren’t being included in their credit profile. Experian Boost™ allows people to include this payment history to their credit score. Best of all – it’s completely free.

Disclaimer – Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost™.


Start by looking at your credit reports to get a sense of where you stand.

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.

It may take months or even a couple of years for your credit score to improve, but if you plan on buying a new app德扑圈官方网址home, or taking on any other big debt, it’s well worth it.

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About the

Total Articles: 37
Sarah Davis is a real estate broker in San Diego, Calif. She enjoys helping both buyers and sellers and was voted one of the top 10 best real estate agents in San Diego in 2013 by Union Tribune readers. In her spare time she talks about real estate on a local radio show and manages her website

Article comments

We invite readers to respond with questions or comments. Comments may be held for moderation and will be published according to our comment policy. Comments are the opinions of their s; they do not represent the views or opinions of Money Under 30. Comments have not been reviewed or approved by any advertiser, nor are they reviewed, approved, or endorsed by our partners. It is not our partner’s responsibility to ensure all posts or questions are answered.
Lourdes Maldonado says:

Great article Sarah! Being in good standing on a single loan or credit card is a great start; but diversifying your profile may help. Having a mixture of credit cards, student loans, installment loans (i.e. a car loan, personal loan, mortgage, etc.) may improve you boost your score. The key is to have different forms of credit that are all in good standing

Sherri says:

Can you get a bankruptcy removed from your credit report?

Tarsha Smith says:

My credit score is 516 and I need help with it

Ciara @ Scoreshuttle says:

Great article Sarah! Being in good standing on a single loan or credit card is a great start; but diversifying your profile may help. Having a mixture of credit cards, student loans, installment loans (i.e. a car loan, personal loan, mortgage, etc.) may improve you boost your score. The key is to have different forms of credit that are all in good standing!

Edzer Richard says:

Thank you for the information.

Rebecca Lohmeyer says:

My credit score is only 525 and I need help with it

Kathy says:

Also, when we purchased this vehicle, we were going through a Chapter 13 bankruptcy, purchased after we filed, and when we told them we were going through a bankruptcy, they stopped sending us statements, they stopped calling, we heard nothing from them. When we came out of the bankruptcy, they informed us we needed to pay the equivalent of 5 payments, or they would repossess the vehicle.

James R Butera Sr says:

They probably assumed that you knew you still had to pay the monthly car note but were saving it.

Johnsilva Triper says:

Which credit repair company is more reliable?

Theresha A Eder says:

what is a reliable company that will help you repair your credit?

Investor Hines says:

Nice Info, Well I did boost my score with the help of Patchupcredit@ Gmail com. I had my credit history smiling, my debts and bad collections were deleted in few days. I’m happy living with benefit, I can’t get rid of my credit cards lol. I really appreciate the help i got all for a few bucks i totally recommend his service for you who need to boost your score fast for a loan or something useful

Gerard Garbutt Sr says:

With FICO giving me a sample score of a person exactly in my situation of 735 it’s obvious that discrimination is my case not bad credit or slow credit, no credit cards, no existing loans, no app德扑圈官方网址home mortgage or rent, no purchases 10+ years (denied10+ years of auto loans)


I was able to take about 4 months searching for some better way to repair credit score .
I was referred to HL forum and that is where you will find the most website with better review .
Hirehackersandprogrammers .com was one of the favorite I found . Apart from HL of course . I had rental history’s which also affected my score . but it took them about 8 1 9 days to finally get my score repaired .
I am currently maintaining my scores and I am proud of my actions .

Eugenia M McAdams says:

I’m have medical bills on my credit report which have been reported by the hospital and by a collection agency. I can’t afford to pay. How do I get them off? Should it have b reported by both? I thought medical bills weren’t supposed to affect credit scores.

Scarlett Leigh says:

Medical bills or ANY unpaid bill (even a water, electric or internet bill) can affect your credit score. The only way to “get them off” is to either pay them or wait 7 years until they fall off. Even if you pay, your credit report will still show you had a collection for up to 7 years. You can’t just get rid of them.

Scarlett Leigh says:

Your best bet is to call and ask to see if they can put you on a payment plan where you can afford to pay them (even if it’s just the bare minimum a month) or if they will possibly settle for less money. A tip: anything that has your name attached (banking account,utility bills, credit cards, anything you finance, student loans, medical bills, car loans, app德扑圈官方网址home loans, your apartment, etc) that you miss a few payments on or don’t pay at all can be reported to the credit agencies and sold to collections companies.

Chrystal says:

I had a $10,000 surgery when my medical insurance lapsed. I had to fill out a form with the hospital that stated I could not afford to pay it and they forgave it/never went on my credit. If you make under a certain income, the hospital should help you get those off, call the hospital and ask. It may be too late since it’s in collections already, if that’s the case, don’t pay it because it won’t change the negative impact since it’s already in collections. Wait for it to fall off.

kyle says:

how do I get multiple inquiries off my credit report. I didnt ize these creditors to pull my credit but now my score has gone from over 700 to 460. Any help would be appreciated

Felix Porras says:

How can I put all my debts in to one bill and pay monthly?
Thank you for the advise.

ROSA says:


Linette Perry says:

What can I do about credit cards that are currently in “collection” status and were CLOSED /CHARGED OFF by the creditor? Would resolving or settling these debts help my credit score? Should I work with the collection agency or contact the credit card company directly? What is BEST thing to do?

Scarlett Leigh says:

The credit card company no longer owns the account which is why it has been charged off and bought by a credit collector. Getting charge off off of your credit report will help so much! My score rose 40 points from getting my one collection off my report.

Regina says:

What did you do to have this removed?

Benita Barr says:

How did you you get the charge off off your credit report?

Scott says:

Wow Thanks for the very great tips. Now I have raised my credit by 582 points.

Billy Ress says:

I know, I really can’t afford an extra $15 a month 🙁
Has anyone heard of a company called the alternative loan machine?
A friend told me that they help protect people from scammers.

Any thoughts on this company?

Rhiana says:

I was actually scammed by The Alternative Loan Machine $4,200. I know them. They are local to me. I paid them for work on my credit that they assured me would be done. It wasn’t done. They promised a refund. It’s been 3 months and the refund never came. Now, no one answers their phone, returns calls, or is on line at their chat “Help Desk” anymore. All the assurances of preventing scams and ensuring work, ended up all being B.S.

Rhiana says:

UPDATE: The Alternative Loan Machine is actually fixing the issue for me now. Apparently the problem was during the period when they were switching from beta testing to going live. Their communications were down while they were transferring everything over to their new system. They’ve since contacted me and are assisting in getting my refund back from the vendor I hired through them, so everything’s getting taken care now. They are at this time doing everything they advertise themselves doing.

Sarah Davis says:

Yes, monitoring your credit score continually is great. But realistically, not everyone can pay an extra $15 to hire a company to do it. Checking your bank accounts every day and opting in for free fraud protection services from your banks and credit cards is also effective.

Matt Bushendorf, Customer Care at says:

We agree that it is very important for individuals to be knowledgeable of their credit standing. When you have a credit-monitoring tool like on your side, you get e-mail alerts whenever there’s a change in your credit score–and you can also see your credit score whenever you want. With the free credit report from the government, you only see your report once a year. If you monitor your credit score regularly, it’s easier to catch inaccuracies before it’s too late.

JanM says:

I don’t carry any balance on credit cards and have never been worried about my score. But, I never thought to check my reports for accuracy. I’m going to order a copy and check them as you suggest. Thanks.

Jake says:

Thanks for all of the help! This blog really inspires me and makes me want to go out and do something!

Penny Stanton says:

If you have impossibly high interest on those credit cards, then do cancel them. It doesn’t help to have open credit cards if the interest rate makes it nearly impossible for you to get the balance down. In fact, banks currently have hardship programs, where they will reduce your interest rate TO ZERO if you agree that they will cancel your cards. Yes, you wll take an immediate hit on your credit score, but that will quickly improve as you pay down your credit cards, which you can now do because you don’t have those usurious interest rates to pay.

Enrique says:

I just want to say that I followed all of the steps listed above and they have proved to be excellent. I received all 3 credit reports and my actual credit score and it has been extremely helpful in knowing where I stand and in which direction I need to head, so thank you very much!!! 🙂

Ace @ says:

Following these 6 steps people with bad credit are sure to succeed. I would like to add while paying down your credit card debts one option that may help you get ahead is to take advantage of credit card transfers. Normally banks will let you transfer your balance (they’re more than happy to take it) for a small fee. One word of caution however, is that this doesn’t really fix the underlying issue, which as Sarah mentioned budgeting and keeping on top of your payments will.


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