How can I rebuild my credit?
August 10, 2020

Dear Frost,

I’m really trying to rebuild my credit, but I feel like there are so many myths out there around it. Can someone please point me in the right direction? — Step Up My Score

Illustration of a credit card, a bill, a calendar and a credit score report

Dear Step Up,

You’re right, there is a lot of misinformation out there about credit scores and how to manage your credit. So to help combat that, let’s start with the basics. There are three major consumer credit bureaus that use your credit reports, which include information about your credit activity, payment history and the status of your credit accounts, to calculate your credit scores. More specifically, those three bureaus—Equifax, Experian and Trans Union—use credit scoring models to turn your credit reports into scores that indicate your creditworthiness. In other words, these scores are helping lenders determine if you’re a credit risk, what kind of interest rate you’ll receive and the amount of credit they’ll extend to you.

The two main scoring models these bureaus use are FICO and VantageScore. Yes, you can have both a FICO score and a VantageScore score from each of the three bureaus. And, each of those scoring models have more specialized models tailored to assess the risks of extending credit to you for different things like mortgages or auto loans or installment loans. So, while we may sometimes think about our credit score as being one score or figure, keep in mind that since the models are different, you’ll likely have multiple credit scores that vary by scoring model. If you check your credit scores with Equifax, Experian and TransUnion, you may have already seen that your credit scores can be different across each of the bureaus.

What’s in a Score?

As we dig deeper, it’s good to know what the bureaus take into account when calculating a credit score. In general, credit agencies arrive at your score by looking at your payment history, outstanding balances (amounts you owe), length of credit history, credit utilization ratio (the percentage of credit you use vs. what you have available to you), derogatory marks (e.g., loans placed with a collections agency), applications for new credit accounts and types of credit accounts (revolving accounts like credit cards and installment loans like a car loan).

To improve your credit score, you can employ a few strategies:

  • Reduce what you owe. That means paying off debt and keeping credit card balances low.
  • Apply for new credit accounts only as needed. While new accounts can increase your credit limit, applying triggers a hard inquiry on your credit that can negatively impact your score (although the importance of that hard inquiry on your score will decrease over the course of two years).
  • Don’t close unused credit cards. Closing a card may increase your credit utilization ratio (you’ll owe the same amount but have a lower amount of credit available to you).
  • Be on time. Pay your bills on time and don’t miss payments. If you have accounts go into collection, it will stay on your credit report for seven years and bankruptcies can be reported for 10 years. In a bind? Call your creditors and talk to them about a payment plan alternative.
  • Check your report for any errors. Visit to request a free report once per year from each of the three credit bureaus and review them carefully. If you’re focused on repairing your credit, and building up your score, you’ll want to be sure any erroneous activities on your credit are reported and managed as soon as possible.

For the most part, building, and even rebuilding, your credit can be managed without extensive outside assistance.


For the most part, building, and even rebuilding, your credit can be managed without extensive outside assistance. As noted above, you can keep tabs on credit scores by requesting a free report from each of the credit bureaus. Apps like CreditKarma and Credit Sesame also allow you to keep track of your credit score for free. And, most major credit card companies place your credit score on the paper or online statements you receive.

But keep in mind, it takes time. For example, when you pay off a credit card, it might take up to 30 days for that company to report it to credit bureaus.

If you’re in a dire situation, you can enlist the help of a credit counselor who will develop a debt management plan for you. They’re also experts in negotiating reduced monthly payments, oftentimes resulting in a consolidated payment to the credit counseling service, which will distribute funds to the appropriate places.

Protect What You Have

The best way to build your credit is to protect what you have. As I mentioned earlier, find ways to check your scores as you work through the strategies outlined above. Another way to safeguard your credit is to lock it. It’s a great identity theft protection measure, and it will also remove the temptation for you to open a new credit card because it requires you to unlock your credit to use it. The extra step of having to unlock your credit can help you think through any temptations and allow you to ask yourself, "Is this a good credit choice for me right now?”

Remember, it’s quick and easy to get into debt, feel underwater with payments due and lower your credit score, but it takes quite a while to bounce back! Make a plan for yourself to pay down debts, pay them on time, and resolve to spend within your means in the future.

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