Credit Repair: 10 Simple Steps to Fix Your Credit

This post is sponsored by Lexington Law. All opinions are 100% our own.

Whether you like it or not there is no running away from your credit score.

In college, Brittany and I both started learning about what goes into a credit score and how to go about improving them. We were able to grow our credit scores into the “excellent range” at or above 800. We have been featured on sites like USA Today and CreditCards.com for having such high credit scores at such a young age.

Along with great credit scores, we learned how to take advantage of credit card rewards. Earning enough travel rewards to take multiple vacations for FREE.

Owning a good credit score can make life much more affordable. Lower interest rates on your loans and exclusive rewards cards can save you tens if not hundreds of thousands of dollars over your lifetime.

Those reasons alone should spark your interest in learning how your credit score is calculated and how you can improve it.

 

1. Get your finances in order

Getting your finances in order is the most important step in personal finance. The only way you can truly be in charge of your money is by organizing it.

For the last ten years, Brittany and I have been using Mint as our hub for all things finance. Mint is a free service and one that we wholeheartedly believe in.

Take the time to organize your finances so you have the big picture of what is going on. Understanding the big picture of your finances will provide you the best information for creating a plan of attack.

 

2. Pay your bills on-time every time

Having just one late payment on your credit history can affect your score. This is why it is so important to set up reminders and have your finances in order to prevent a late payment from happening.

If you have a month where there is just not enough money to go around, we have all been there, then make payments strategically. Your credit card companies and mortgage lenders will always report a late payment, but your utility companies probably will not.

Do your due diligence to never get in the habit of having to miss paying your bills.

 

3. Pay off highest interest balances first

This might go against Dave Ramsey’s snowball method, but mathematically it is simple. Pay off your debt that has the highest interest rate first. High-interest debt is by far the hardest to pay off and get out of.

When you make a payment towards your student loans at 5% interest you are receiving a 5% return on your money. Compare that to paying down a 25% interest credit card and you are making a 20% higher return on your money.

When it comes to money and your life in general it’s always best to seek the greatest value.

 

4. Review your credit report

Once you have your finances all organized and you have a payment method for your debt you want to get your hands-on your credit score. One of the best way to do this is to sign up for a FREE account with Credit.com.

Once in your report you will learn what your score is, how it is calculated, and the steps you can take to improve it.

 

5. Dispute negative marks and errors on your account

Luckily, we live in the 21th century and you no longer have to write a handwritten letter to make a dispute on your credit score. Focus on the big hitters derogatory marks like collection accounts and judgments.

You could try disputing errors on your own or work with a reputable credit repair company like Lexington Law.

 

6. Dispute late payments

Errors happen and they suck to have to deal with. Lenders are humans too and can make mistakes when tracking payments.

If you are ever in a situation where you make a payment on time and it shows up on your credit score as late, you need to get it corrected.

Lat payments weigh very heavily on your overall credit score. Take the time to remove all errors from your report.

 

7. Decide if you want to hire a company or DIY your credit score

When it comes to credit repair you have two options.

You can try to repair and improve your credit score on your own with limited results. Or hire a credit repair company that has a long history and proven results.

There are pros and cons of each type of credit repair so it is important to pick which is right for your situation.

If you have struggled with your credit score for a while and can’t seem to figure out how to repair it we highly recommend you use Lexington Law credit repair service. Lexington Law has saw over 10 million removals.

Click here to learn more about Lexington Laws free credit report summary & credit repair consultation.

 

8. Increase your credit limit

One of the fastest ways you can increase and repair your credit score is asking for a credit line increase. Your credit card utilization is another large factor that goes into calculating your credit score. Holding a balance of over 30% of your credit card limit will negatively affect your score.

You can pay down your balance or ask for a credit line increase to instantly improve your ratio below 30%.

To get a credit line increase simply call and ask. If you have a good payment history, most companies are more than happy to increase your limit. Credit card companies make their money when you hold a large balance on your credit card.

Always remember that a higher credit limit does not mean you should be spending more. In fact, it is the exact opposite. We should learn from our mistakes and learn how to only spend what we can pay off each and every month.

 

9. Open another credit card account

Another quick way to increase your credit card utilization ratio is opening up a new account. As long as you don’t carry a balance on the new card, your overall available credit immediately increases.

Make sure you find a credit card that does not charge an annual fee, so you never get surprised. We have been using Capital One for years and love their selection of zero annual fee cards.

 

10. Keep your old credit card accounts open

The age of your credit lines has a small, but significant impact on your overall credit score. Although it might seem like a good idea to close an account once it’s paid off, think again.

Closing a credit card with a ten-year history will reduce your overall credit history, in turn negatively affecting your credit score.

If you want the satisfaction of paying off a credit card and you don’t plan on using it anymore, simply cut it in half. You don’t have to use the card anymore, but your best bet is not to close down the account.

 

11. (Bonus) Be patient

Repairing your credit score is not going to happen overnight. Stay patient and look at the big picture. Some of the steps above might help increase your credit score immediately while others take some time.

Our excellent credit scores did not happen overnight. We took the time to learn how to use credit correctly and to our benefit.

You can certainly do the same! Your first step should be signing up for a FREE credit sesame account.

Have you tried to repair your credit?

How do you track your credit score?

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