Published: February 04, 2021
3 Minutes

How to Help Fix Your Credit Score With These 4 Tips


Dan Rafter

Contributing writer

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Woman using laptop to research ways to improve her credit score.

Need a mortgage loan? Want to finance a car? Eying a credit card with an amazing rewards program?

You’ll need a solid three-digit FICO® credit score to qualify for any of those. And if you don’t have one? You’ll need to learn how to fix your credit.

Most lenders consider a FICO score of 740 or higher to be an especially strong one. But if your score is too low—say, under 640—you may struggle to qualify for loans and the best credit cards.

The good news: It’s possible to fix bad credit. Credit repair requires patience and a commitment to developing stronger financial habits.

Here are four ways to help fix an ailing credit score.

Tip 1: Establish a new history of paying your bills on time

The problem: late or missed payments – The biggest hurdle to a strong credit score is a history of late or missed payments. Payment history is important because a single late payment can send your score tumbling by 100 points.

Plus, late or missed payments hang around: They stay on your three credit reports—one each maintained by the national credit bureaus of Experian, Equifax and TransUnion—for seven years.

The fix: Make sure to pay your credit-card bills and loan payments on time each month. Know that there is a bit of a grace period, too. Your creditors can’t report your payments as late until at least 30 days past due. So if you’re a week late on your credit-card bill, pay it today.

The more months you pay all your bills on time, the greater the impact this will have on your credit score. But you will have to be patient. Depending on how low your credit score is, it can take several months, maybe even a year or more, of on-time payments to significantly improve your credit score.

Tip 2: Pay down your credit-card debt

The problem: too much debt – Do you owe thousands of dollars in credit-card debt? This will hurt your credit score. Paying down this debt, or eliminating it completely, will do the opposite, causing your FICO score to rise.

There’s some debate about how much credit-card debt you can have and still have a solid credit score. But, in general, if you are using a lower amount of your available credit, your score will be higher.

Paying down credit-card debt is not an easy task, so it’s smart to have a strategy.

The fix: You can devote whatever extra money you have each month to reducing your credit-card debt. The more you pay off, the more your credit score will rise over time.

You can try one of two methods to pay off your cards in a more systematic manner:

  • The debt snowball approach – After making all of your minimum required payments each month, you then devote any extra money to paying down the credit card with the lowest balance first. Once you pay off that low-balance card, move on to the card with the next lowest balance.
  • The debt avalanche approach – You pay off the cards with the highest interest rates first. This method will save you the most money because you’ll eliminate higher-interest-rate debt first. But for some people, paying down a credit card as quickly as possible, with the debt snowball approach, provides an important psychological boost.

Tip 3: Don’t close those old credit-card accounts

The problem: pruning plastic – After you pay off a credit card, you might be tempted to close that account. Don’t. This will hurt something called your credit-utilization ratio, something that plays a big role in your credit score.

This ratio measures how much of your available credit you are using. If you are using a lot of your available credit, your score will fall. If you are using a smaller amount, it will rise.

Closing a card that you’ve already paid off will automatically cause your credit-utilization ratio to increase, hurting your score.

Here’s how this works:

Say you owe $3,000 in credit-card debt spread out over four cards each with a $3,000 credit limit. This means you are using $3,000 of your $12,000 available credit—or 25 percent.

If one of these cards does not have a balance and you close it, you are now using $3,000 of $10,000 in available credit—or 30 percent. That’s a higher credit-utilization ratio.

The fix: If you have a credit-card account with no balance, keep it open. Just resist the temptation to run up new debt on it.

Tip 4: Check your credit reports

The problem: credit report errors – You may have incorrect information on your credit report—such as a notice that you paid your auto loan late two years ago when you know you’ve always paid this bill on time. If so, the error in your credit history could be dragging down your credit score.

The fix: You can order one free copy of each your three credit reports each year from the website. Do this. Then review your reports.

If there is any incorrect information on them, correct the mistake with the reporting credit bureau. Removing an error from your credit reports could provide a quick boost to your score.

LIFELOCK TIP: If your credit score drops suddenly, you may be a victim of identity theft. Contact one of the three major credit bureaus and place a fraud alert in your credit report.

Editorial note: Our articles provide educational information for you. LifeLock offerings may not cover or protect against every type of crime, fraud, or threat we write about. Our goal is to increase awareness about cyber safety. Please review complete Terms during enrollment or setup. Remember that no one can prevent all identity theft or cybercrime, and that LifeLock does not monitor all transactions at all businesses.

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