Simple Tips to Fix Bad Credit

Maybe you’ve got a longer credit history, but it’s not exactly spotless. The good news is that you can raise a bad credit score if you’re willing to put in the work. The bad news is that it’s not a quick process. But given the myriad effects your credit score has on your life, it will be worth the time and effort.

Know what’s in your credit report

FICO recommends making sure you know exactly what’s in your credit report before you embark on a plan to improve it. That way, you’ll be able to spot any errors or instances of fraud that are artificially dragging down your score and dispute them.

Don’t close old accounts

Remember that 15% of your credit score hinges on the length of your credit history. Once you see your credit report, it might be tempting to close those old, unused accounts, but that can actually hurt your score.

On the other hand, having the credit there — but not using it — can help you. Cut up the cards if you have to, so you don’t use them. One exception may be a credit card with a hefty annual fee — you may want to get rid of it if you no longer use it in order to avoid the fee.

Set up a bulletproof payment plan

Set up automatic payments to make sure you pay your bills on time. If you can, pay more than the minimum due so you won’t pay as much in interest.

If you’re having trouble making the minimum payments on all your credit accounts each month, it may be time to contact your creditor and set up an alternative payment plan that you know you can keep up with. Of course, creditors are under no obligation to work with you, but most are willing to negotiate on minimum payments, interest rates, and late-payment charges.

Consolidating your existing debt into one loan can help you manage payments as well. Consider a balance transfer credit card to lower your interest payments on credit card debt and make only one payment.

Chip away at high balances

Remember, 30% of your credit score is based on how much of your credit you use — charge too much and you look like you’re at risk of overextending yourself. Experts recommend aiming for a balance of no more than 10% of your available credit. Focus on taming your credit card balances first — that will help your score more than attacking an installment loan.

Shop for new credit relatively quickly

When you shop around for a loan, your credit score can dip when potential creditors check your credit history as part of your application. You can help combat this by confining your shopping to a relatively short period of time — most likely 30 days (though it could be as short as 14 or as long as 45, depending on whether your lender is using an older or newer FICO scoring formula). Then, even if multiple potential creditors pull your report in a two-week span, FICO will count this as just one inquiry rather than several.

How Do I Check My Credit Score?

Now that you’ve learned all the essentials about your credit score, let’s talk about how to check it. There are several places you can do this, but some are better than others.

Note that by law, you are entitled to a free copy of your credit report from each of the three major credit bureaus every year Unfortunately, this report does not actually include your credit score, but it does include all the information your score is based on — what credit accounts you have, how much you owe, whether you’re paying on time, and so on.

FICO and the credit bureaus

You’ll get the most useful, detailed information either straight from FICO or one of the credit bureaus, but you will have to pay for these services. Here are your options:

  • myFICO offers two main services: one-time FICO scores and reports as well as ongoing credit monitoring. You can opt for a one-time credit score and report from one credit bureau of your choice for $19.95, or you can get your scores and reports from all three bureaus for $59.85. Ongoing credit monitoring ranges from $14.95 a month to $29.95 a month. The higher price gets you triple-bureau monitoring and identity-theft protection.
  • You can get your Experian credit report and FICO score for $19.95, or a three-bureau report and FICO scores from all three bureaus for $39.95. Ongoing credit monitoring of your Experian credit report and FICO score is $4.95 for a month, then $19.95 every month thereafter.
  • Ongoing credit monitoring with Transunion will give you access to your Transunion credit report and FICO score for $17.95 a month after a $1, one-week trial. The service includes several identity-theft monitoring features. Unfortunately, there is no readily available online option to order a one-time credit score and report without signing up for this service.
  • Equifax offers your FICO score and Equifax credit report for $19.95. Be careful, because it also offers its credit report with the less-useful Equifax score for $15.95, or $39.95 for reports from all three bureaus. There is also an ongoing credit-monitoring option that includes your FICO score for $14.95 a month.

Credit monitoring services

There are a number of credit-monitoring services such as Identity Guard and Lifelockthat offer more comprehensive identity-theft protection than most of the services offered by the credit bureaus. Prices typically range from about $8.99 to $26.99 a month. Most also include options for either single- or triple-bureau monitoring. However, note that the credit scores that these services access are typically not FICO scores.

For more details on credit monitoring services, check out our guide to the best credit monitoring services for recommendations.

Free credit report sites

It’s hard to beat free, so what’s the catch? Well, some less-than-reputable sites aren’t really free at all — they come with strings attached. Often you’re signing up for an initial free service that sticks you with another monthly bill when your trial period ends.

Fortunately, there are reputable sites that do let you see your credit score for free. For more details, see our guide to the best free credit report sites. Also note that you will notbe seeing your actual FICO score, which is what most lenders see and use, and typically will only see a score based on information from one credit bureau, not all three.

  • Credit Karma is partnered with TransUnion. It has a good variety of credit tools and educational information as well as fewer ads than its competitors. You will see your VantageScore based on TransUnion data.
  • Credit Sesame is now also partnered with TransUnion. Their free service actually provides identity theft insurance, but paid products are pushed more, too.
  • Quizzle is partnered with Equifax. It provides a full credit report every six months. You will see your VantageScore based on Equifax data.

Banks or credit-card issuers

A number of banks and credit-card companies are starting to provide credit scores for customers on monthly statements or online. Some lucky cardholders, including Chase Slate, Barclaycard, and Discover it customers, will have access to their FICO scores. Some others will be stuck with less useful non-FICO credit scores. Keep in mind that in most cases, you won’t have access to your actual credit report, too.