Steps You Can Take to Repair Your Credit

Get your reports

The three credit bureaus—Equifax, Experian, and TransUnion—use the Web site AnnualReport.com to fulfill their legal responsibility to provide you with a free copy of your credit report once every twelve months.

Gather your facts

If you see something on your report that you know is wrong, that is a good thing. The reason is that you can get it removed and doing so will improve your credit report and score. If you happen to find something you believe to be incorrect, you should prepare to argue your case as convincingly as possible. You may not even need to provide proof but should be ready in case you do. Any receipts, canceled checks or statements showing payment on a specific date will help. Having that type of information ready should someone ask for it will strengthen your case.

Dispute errors on your report

When you find an error on your credit report, you may dispute it. However, you should know that each credit reporting entity has its own procedures for disputing an entry on your report. (Refer to our section on the three credit bureaus and their dispute processes.) When you dispute an entry on your credit report, the credit bureau contacts the business that made the report and asks them for evidence to support their report. If the reporting business responds with proof, the entry will likely stay on the report. If they do not respond, or if they fail to provide proof, the entry will be removed.

If you provide evidence that is stronger than what the reporting business has, you will most likely prevail, and chances are the entry will be removed.

Please note this: If the credit bureau believes your dispute is frivolous, they do not have to respond to it in a timely fashion. You should be careful not dispute something that is insignificant or obviously true. This will only waste your time and leave you frustrated.

The least amount of time you should expect to pass before seeing a result is 30 days. Typically, the amount of time required to complete an action is 45 to 60 days. If multiple communications take place between you and the credit bureau or between the bureau and a creditor, drawing a conclusion in the matter may take several weeks.

Regardless of the time or circumstances involved, don’t lose heart and don’t lose patience. You can be confident in the fact that if you can prove you are correct, you will eventually prevail.

Improve your debt-to-credit ratio

If you have two or three credit cards, use them to help your credit score. If you can do it, the best practice is to keep a low balance on a small number of cards. Divide what you owe by the limit on the card. If the result is 10% (.1) or less, that’s good. This keeps the account on your credit report and figures positively toward your debt to credit ratio, thus helping your FICO (credit) score. Many factors affect your credit score. Payment history (35%), amount of debt (30%), types of accounts (10%), how long you’ve had credit (15%), and your history of looking for credit (inquiries from lenders asking for a copy of your credit report) (10%). You should try to learn about each of these factors and how you can change your financial behaviors to improve your credit score. Please review our section on “What is a Credit Score?“