How to Fix Your Credit in 5 Steps

Get tips on how to improve your credit rating by following these five simple steps.

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Get a credit report

You’re entitled to a free credit report every 12 months from each of the three major credit bureaus: Equifax, Experian and TransUnion. You can get your reports through AnnualCreditReport.com. Checking your own credit reports and scores does not hurt your credit.

Ordering all three reports gives you a complete view of your credit history and lets you spot errors or omissions that could be dragging down your scores. Each bureau gets its information from different sources, so the information in one report might not be reflected in the others.

Check for errors

The first step to repairing your credit is to check your credit report for errors. You can get a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once per year at AnnualCreditReport.com. Reviewing your credit report will allow you to see if there are any inaccurate or incomplete items that could be dragging down your score. If you find any errors, you can file a dispute with the credit bureau to have them removed.

dispute any errors

If you find any errors on your credit report, you should dispute them immediately. You can do this online, by mail, or over the phone. To dispute an error, you will need to provide documentation supporting your claim. Once the credit bureau receives your dispute, they have 30 days to investigate and resolve the issue. If they find that the error was indeed incorrect, they will remove it from your report and send you an updated copy.

Pay your bills on time

One of the biggest factors in your credit score is whether you pay your bills on time.

If you have a history of late or missing payments, it will be reflected in your credit score. To improve your credit score, you need to show that you can pay your bills on time, every time.

Here are a few tips to help you pay your bills on time:

-Set up automatic payments: Many lenders offer the option to set up automatic payments from your checking or savings account. This can help make sure that your bill is paid on time, every time.
-Keep track of due dates: Put all of your bills in one place — online, in a file, or in a binder — and make sure you know when each bill is due.
-Make a budget: Knowing how much money you have coming in and going out each month can help you plan for upcoming expenses and ensure that you have enough money to pay your bills on time.
-Ask for help: If you’re having trouble making ends meet, reach out to a non-profit credit counseling agency for help creating a budget and developing a plan to get out of debt.

Keep your credit utilization low

One of the most important things you can do to improve your credit is to keep your credit utilization low — in other words, don’t max out your credit cards. Credit utilization accounts for 30% of your credit score, so this is a crucial step.

You can lower your credit utilization by either paying down your debt or by asking for a higher credit limit from your creditor. If you have a good payment history with a particular creditor, there’s a good chance they’ll be willing to give you a higher limit.

Another way to lower your credit utilization is to make sure you’re not carrying debt on cards that you don’t use regularly. If you have an unused card with a high limit, consider closing the account.