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How Can I Repair My Credit Myself?

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In a Nutshell

This article will explain how credit reports and credit scores work and provide some simple but effective steps you can take that will help improve your credit score. You probably won’t be able to go from a 550 to a 800 credit score overnight but there are definite steps you can take that will help you repair your credit by yourself, without needing to hire a credit repair company.

Written by Attorney Amelia Niemi
Updated August 1, 2023

Having poor credit often feels like a black hole that it’s impossible to dig your way out of. This couldn’t be further from the truth. You probably won’t be able to go from a 550 to a 800 credit score overnight. However, there are definite steps you can take that will help you repair your credit by yourself, without needing to hire a credit repair company. This article will explain how credit works and some simple but effective steps you can take that will help improve your credit score.

Understand How Credit Scores and Credit Reports Work

Your credit score is a brief snapshot of your financial life. Think of it like your overall GPA. FICO scores are the most commonly used numbers, but there are different companies that provide credit scores as well. FICO scores range from 300 to 850, with scores above 670 considered good.

Your credit report is more than a number. For one thing, it’s much more detailed and includes personal information, including where you’ve lived and worked. Credit reports list your history of taking out, and repaying loans, credit cards, medical bills, and other debts. Your credit report is like a transcript from school, which lists the classes you took and individual grades. It’s much more detailed than your credit score, which is only a number.

Both your credit score and your credit report give potential lenders information about whether or not you’re a “good bet” to loan money to. Most people have a credit score between 670 and 740, but many people have a lower score.

Having a stronger credit report can help you out in a number of ways. You’ll be able to get better deals on your auto loans than someone with poor or fair credit, who might have to pay higher interest rates. You’ll have an easier time remortgaging your home, or taking out a new loan. Better credit scores can even help you get hired!

People with “negative credit,” or bad credit, often have a long history of delinquency on their bills. They may have defaulted on loans and been sued for not paying them back. Their cars may have been repossessed, personal loans might be marked with a charge-off, or maybe they lost a home in foreclosure. Each of these has a negative effect on a person’s credit history.

The good news is that, over time, negative information on your report will be replaced with something new. Although a foreclosure can stay on your history for 7 years, and bankruptcy can stay on your credit history for up to 10 years, these negative items will get overshadowed by newer data points. After some time, bankruptcies and foreclosure will be pushed to the bottom and new lines of credit, credit cards, and loans will become more of a focal point.

Gather Your Free Credit Reports

There are three major credit bureaus in the United States: TransUnion, Equifax, and Experian. While all three provide credit histories, certain things may only be reported to one or two of these companies. It’s a good idea to regularly check your reports from each of these companies.

Every year, you can get a free copy of your credit reports. The quickest way is to go to and request the report online. You don’t need to request all three at the same time, but you should look at the free reports from each credit bureau once a year to make sure that your financial affairs are in order.

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Check for Errors on Your Credit Reports and File Disputes

After getting your credit reports, look through them for any errors. Some may be innocent, but others could be a sign of a scam or identity theft. Removing errors from your report, if there are any, is a quick way to improve your history. After all, they aren’t representative of your financial choices.

To check for errors, make a list of all the reported accounts. Then, take a look at all the bills you have. These could be for your credit cards, medical bills, student loans, or any other debts and financial accounts you have from various collection agencies and collection accounts. Try to find the most recent statement for each account, so the information is as up-to-date as possible. Compare the accounts you know about to what’s on your credit report.

If anything doesn’t add up from your credit report, it could be a clerical error, such as a wrong address or credit accounts listed twice. You might not recognize a particular collection agency reporting a debt. Old, negative credit might still be on the account after it should have fallen off. Or, it could be something more sinister, like someone using your identity to open, and run up, a credit card in your name.

If you discover a mistake, incorrect credit information, inaccuracies, or bad account on your report, you should file a dispute with the credit bureau that shows this mistake. Give the credit agencies as much information as possible in your dispute letter about the error and why you believe it’s a mistake.

The Federal Trade Commission (FTC) requires each consumer credit bureau to investigate disputes, and remove them from credit histories if they agree there is an error. Items like fraudulent credit card accounts in your name and other forms of identity theft need to be removed from your credit report entirely.

By regularly monitoring and removing old, negative accounts and errors, you’ll help your credit score and credit report improve.

Build New Credit by Taking On New Loans

Having healthy credit isn’t about being debt free. It’s about demonstrating that you are a “good bet” for lenders and showing that you are responsible with the credit you do have. If you have a history of paying back other lenders and other debts on time each month, you are more likely to pay back new debts as well. New lenders will be more likely to extend you credit.

Even if your credit score is low at the moment, making it difficult to take out a new mortgage or car loan, you can start small. This is often the case for someone who has just filed bankruptcy – they need to rebuild their credit after taking a hit. A great way to start is by taking out a small, secured loan on your house or car.

You could also have a low-limit secured credit card. Having a card with a low credit limit can help you demonstrate a good payment history. If you can pay off this loan each month, you’ll start building up a positive credit history in no time. Eventually, you’ll be able to apply for cards with a higher credit limit, indicating that your credit card company has more trust in your ability to pay back your debts.

New credit is more important to future lenders than old credit, because it shows who you are now. It reflects your current loan repayment habits and is a better indication of whether or not you are a “good bet” for new debt.

Additionally, taking on new credit will increase the overall credit available to you. Having more credit available at any given time will give you a better credit utilization ratio. That means that you have more credit available. Lenders like to see this because it means that other lenders trust you to pay your debts on time. Having a good credit utilization ratio can improve your credit score.

It can be scary to take out new loans, especially if you don’t trust yourself to use a new credit card wisely for the time being. However, you don’t need to do much, if anything, with this new loan, other than make your monthly payments. Simply having the account and paying the bill will get you off to a good start.

Follow Healthy Money Habits

Finally, the best way to repair your credit is to continue to follow healthy money habits. After all, slow and steady wins the race.

These little things include making and sticking to a budget each month. What is your total income? What bills do you have to pay? Put these into a spreadsheet to see what you have left over at the end of the month. Once you know how much extra income you have, you can start putting some of that extra in a separate savings account for emergencies. You don’t need to cut out every cup of coffee from your spending. But, if you can build up an emergency fund over a few months, you’ll have some extra breathing space when an unexpected surprise hits.

Having this emergency fund means that you’ll be able to pay for a new car battery outright, without putting it on a credit card. This will help improve your credit utilization ratio, which is an important factor.

Additionally, be diligent about paying your bills on time. If you can, set these payments to automatically withdraw from your account every month. Although paying your utilities on time doesn’t usually have a positive impact on your credit, late payments can ding your credit. However, you can ask your landlord to report your on-time monthly rental payments to the credit reporting agencies to establish a history of responsible payments.

Paying your credit cards off in full each month, instead of carrying a balance is also an excellent money habit to follow. In addition to improving your credit utilization and giving you more available credit each month, you won’t have to pay high interest rates on the credit card balance or risk late payment fees.

These feel like small steps each month, but over time they will help you create a more positive picture of your credit, and a better credit score. If you can follow the same healthy habits day in and day out, you’ll get that point where maintaining healthy money habits, and keeping your good credit, are as routine as brushing your teeth in the morning.

Let's Summarize...

Building up your credit over time can feel like an impossible mountain to climb. Just remember, a journey of a thousand miles begins with a single step. Many people are able to rebuild their credit on their own.

By starting with that small step, you’ll be able to gradually strengthen your credit report and improve your credit score. As your new credit profile takes shape, it will replace and overpower your credit history. 

Written By:

Attorney Amelia Niemi


Amelia Niemi is an attorney licensed in Illinois. She received her J.D. from DePaul University College of Law. At DePaul, she was a staff writer for the DePaul Journal of Art, Technology & Intellectual Property Law. Her legal practice includes multi-million-dollar international b... read more about Attorney Amelia Niemi

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