How to Repair Bad Credit Yourself

repair credit yourself
Written by Melanie Lockert

If you have bad credit, you probably want to do whatever you can to make it better. At some point, you may have even considered working with a credit repair company to help you boost your credit. If you’re a hands-on type of person, you can also do it yourself. Yep, you can DIY credit repair by taking the following actions:

1. Access your credit report

check credit reportWhen it comes to your financial life, your credit report is a hugely important document. Your credit report contains valuable information on the accounts you have open, how much you owe on those accounts, and any credit inquiries. It also contains personal information as well. This one report can be pulled by lenders to review. Not only that, but the information in your credit report directly affects your credit score.

Your credit score is a three-digit number that shows how creditworthy you are as a borrower. Because your credit report and credit score have a huge impact on your life — like getting approved for an auto loan, apartment, and more — you want to make sure everything is accurate.

You can check your credit reports for free at, where you can access credit reports from all three of the credit bureaus. The credit bureaus, Experian, TransUnion, and Equifax all collect data from creditors that end up in your report. Though much of the information is the same, your reports will not be exactly identical. Why? Because not all creditors report to all of the bureaus and they may not report information at the same time, either.

It’s also a good idea to monitor your credit reports on a monthly basis. Check out our list of top credit monitoring services to get started.

2. Review credit report for errors

It’s important that the information in your credit report is accurate. However, that is not always the case.

In fact, in recent years the FTC found that approximately 20 percent of credit reports had errors. These errors could end up costing you money if you end up getting higher interest rates because some information is incorrect in your report.

Even if there are no errors on your credit report, it’s important to review where you are at if you want to repair bad credit yourself. You want to see exactly how much you owe, how many accounts you have, etc. so you can take charge and move forward with next steps.

3. Dispute errors

disputeIf you find any errors on your credit report, you want to dispute the errors right away. If there are errors, you don’t want to apply for any new credit until the mistakes are fixed.

In order to dispute errors, contact the credit bureaus so they can fix the mistake. Wondering where to start? The Federal Trade Commission has outlined steps to take, including a sample letter to send, so that you can dispute the errors effectively.

The credit bureaus must check out and investigate your claims within 30 days. It’s important to be your own advocate and continue to follow-up until this issue is resolved.

4. Identify why you have bad credit

If you want to repair bad credit on your own, you first need to identify why you have bad credit in the first place. Is it due to missed payments? Are you maxing out your credit cards? Or have you applied for too many loans in a short period?

To get a better understanding of how your credit score is determined, here’s the breakdown on how your FICO score is created:

  • Payment history – 35 percent
  • Amounts owed – 30 percent
  • Length of credit history – 15 percent
  • New credit – 10 percent
  • Credit mix – 10 percent

So a whopping 65 percent of your credit score is from two things — if you make your payments on time and your credit utilization, or how much you owe in relation to your available credit.

Because of this it’s crucial to make your payments on time and keep your balances well below their credit limit.

You also want to be mindful of applying for too much credit and closing accounts haphazardly. If you’re in debt, you may have an inclination to close accounts. But the length of your credit history matters and you don’t want to lose some of that by closing those accounts. You can keep them open and use them sparingly.

5. Take action to make things right

After reviewing your credit report, disputing errors, and identifying the cause of your bad credit it’s time to take action!

Bad credit is a problem, not a life sentence. So you need to find a solution and work towards that. Let’s say your accounts are past due and in collections. It’s important that you work with  your lender and get your payments in good standing as soon as possible.

Once your accounts are in good standing it’s key to start paying down that balance ASAP. Do what you can to cut expenses so you can contribute more to paying down debt. Consider getting a free credit counseling session with the National Foundation for Credit Counseling, a nonprofit helping consumers with their finances.

Getting current with your past due accounts and paying down your debt will make a big difference. Remember, 65 percent of your credit score is determined from payment history and amounts owed. Taking these steps will have the greatest impact.

6. Be responsible with credit

Repairing bad credit by yourself won’t happen overnight. It will be a process. It’s like learning how to forgive someone and trust them again after a dispute. Creditors want to trust you again but you need to prove to them that you are a responsible borrower and the only way you’ll do that is through time.

Going forward, you’ll want to be responsible with credit and be a mindful consumer. That means keeping your balances below 30 percent of your overall available credit. It means making all of your payments on time and if you can, in full.

Keep your credit card balances below 30% of your overall available credit.

You’ll also want to keep your accounts open. If you’ve had to apply for bankruptcy or have limited options for new credit, consider applying for a secured card or a subprime card.

A secured card requires a cash deposit as collateral in case you miss your payments. The deposit in most cases is used as your credit limit. This type of card can help reestablish your credit.

A subprime card is an unsecured card that is geared toward consumers with bad credit. They may have easier approval odds but also higher APRs and fees. Using these credit options, you may slowly be able to rebuild your credit.

Final word

If you feel like you’ve hit a dead end because you have bad credit, don’t worry. There are options out there and steps you can take to repair bad credit on your own. Don’t throw your money at a credit repair company, when with a little time and effort, you can likely do most of these things yourself. After a while, you’ll improve your situation and be in better standing with your credit.