How to Repair Credit Score

A good credit score will help you obtain credit and approval for loans easily whereas a poor score will place you in a high risk category or stop you from being able to apply for loans at all. Repairing your credit score is possible and you can rebuild your rating from the ground up; however it may take some time and financial planning so it’s best to get started immediately. 

1. Control your cards

The payment history and balances remaining on credit cards are the major factors that affect your rating. A balance with more than 35 percent of your overall available limit will count against you, even if you make regular monthly payments. Keep balances on your cards low. Rather than maxing out one card, spread balances over a few cards, keeping to the 35 percent rule. Before you adopt this strategy, do your research and compare interest rates between cards. 

2. Avoid multiple store cards 

When shopping for big ticket items, be wary of the discounts and financing deals offered by retailers as these come with exorbitant interest rates and fees. Applying for a once-off retail card when you already have an existing credit card is not the best strategy. Multiple applications for new credit cards within a three month period can affect your credit score. Unless you manage to save a significant amount of money over time, don’t apply for credit you don’t actually need. 

3. Pay your bills on time 

Late payments are responsible for significant reductions in credit scores. Payments on loans and credit cards should always be made on time every month, even if you pay just the minimum amount. Missing a mortgage payment can have even more severe repercussions on your credit rating, showing up on your report history for up to seven years. 

4. Keep an eye on your credit 

One of the quickest and easiest ways of boosting your credit score is to review your credit reports with all three agencies – Callcredit, Experian and Equifax – and correct errors or outdated information. Many websites allow you to obtain a free credit report such as You can initiate a dispute over incorrect information and have it removed within 30 days.  

5. Keep good accounts open 

Having history counts so even if you have an inactive account, don’t close it. A positive, long-term history with your creditor will help to repair your credit score. Avoid closing older and unused accounts even if you no longer use them. Having five credit card accounts open, even though you only use two of them can be beneficial. Leave the other three cards somewhere safe and keep on creating good credit history. 

6. Go solo 

Joint credit card accounts and loan sharing is common during a marriage. If divorce happens, the legalities do not release one or both parties from financial obligations, for example a joint account or mortgage. As proceedings move forward, pay off and close all joint accounts or decide whose name to remove from each account so that only one person is responsible for it. Re-establishing independent credit takes time. 

7. Don’t consolidate balances 

Consolidating balances onto one credit card can hurt your credit score. Maxing out on one card will detract from your rating and unless you save a large fortune in interest charges, your credit rating will be healthier if your balances are spread across a few different accounts. Alternatively you can pay off your balances using a debt consolidation loan instead of credit card consolidation. 

8. Negotiate with creditors 

Instead of skipping payments or defaulting, contact your creditor and agree on a resolution that is acceptable to both parties. Never let an account go to collections. It is far better to negotiate with your providers to increase the payment term or arrange a monthly repayment scheme which will protect your credit score rather than shred it. 

9. Avoid excess queries 

Applications for credit cards and loans trigger a potential creditor inquiry with the credit agencies. These queries remain listed for two years and too many queries can negatively impact your credit score. However when looking for a mortgage or car loan, multiple inquiries for the same purpose within a 30 to 45 day period will not hurt your rating as in this situation they are counted as one single inquiry. 

10. Don’t go bankrupt! 

Bankruptcy should be avoided at all costs if you are trying to repair your credit score. Filing for bankruptcy will impact your rating for up to ten years and is the worst possible action to take. Nor does it offer an easy way out of financial responsibilities. Bankruptcy will make it almost impossible to obtain any type of credit or loans in the future.