Having good credit can open up a world of opportunities you wouldn’t have if your credit was terrible. Things like owning a home, buying a new car, and getting a loan for a trip of a lifetime.

Did you know that some jobs even check your credit to ensure you are trustworthy and financially responsible?

If you have bad credit, no doubt, you might feel like you’re in too deep to pull yourself out. There are credit repair agencies out there, but many of them are sketchy as all get out.

How do you know which to trust?

You can fix your credit without handing over any extra money or information to a credit repair agency. You just need to follow the steps below.

Get A Free Credit Report

The first step you need to take before you can even think about fixing your credit is getting a free credit report. One from each of the three main credit reporting bureaus.

Experian, TransUnion, and Equifax will all give you a free credit report once a year. Sign up for this free credit report here. Once you have your credit report, which you can receive by mail or download digitally — you have a starting point.

Read over your credit report carefully and look for any mistakes. If you see a lot, most likely, you’ve been a victim of identity theft. This can wreak havoc on a person’s credit.

The first thing you need to do is file a report with the police, and then you can file a claim with the credit bureaus. They will place a hold on your credit and help the law with any information to assist in catching the thief.

If any of them were mistakes by a bank, you can dispute those and show proof of your payments.

Even if there are no mistakes on your credit report, looking over it will let you know what needs fixing and tell you your score.  This will help you focus on what needs attention, whether it’s paying down your bills or getting rid of negative reports.

Pay All Your Bills On Time

Most people get into a situation where their credit is bad simply because they don’t create and stick to a budget.

The purpose of a credit report is to prove that you are trustworthy with money. It makes sense that in order to verify that you will be credible for paying back a loan, you need to be responsible enough to pay the bills you have now.

When making a budget, the first step is to make sure you aren’t spending more than you earn. Next, you need to allocate the money left over after paying all your bills to the right places.

When you pay your bills, the best habit for improving your credit score is to pay more than the minimum payment at least three days before the due date.

Pay Down Balances

Once you have the habit of paying all your bills on time every month, your next goal should be to pay down your credit card balances.

To maintain a good credit score, it is best to keep your debt ratio below 20%. This means that if you have a credit card with a limit of $500, you want to keep the balance below $100.

If you have more than one card and need to decide how much to pay for each, financial guru Dave Ramsey suggests the lowest debt first, then work your way up.

Fixing your credit won’t happen overnight. You didn’t get bad credit overnight unless you went on some crazy shopping spree. So keep a balanced view of the progress you are making.

Consistently pay your bills on time. Pay down the balances and keep them below 20% credit utilization.

You’ll eventually have paid off entire balances of some of your credit cards. Once you reach the milestone of having your balances below 10% credit use, you’ll have a much higher credit score.

No Credit?

If you are just starting out or starting over, your problem isn’t that you have bad credit, but that you have no credit.

What do you need to do to improve your credit score now?

The best way to start out is to get a secured credit card through your bank. To do this, you need to give your bank a set amount of money, usually somewhere between $250-$500.

They will put this money in a separate account and extend you a line of credit for that amount of money. You won’t spend more than that amount, but you will be paying this bill just as it would be a regular credit card.

Your consistent payment of this bill — preferably the entire balance each month — will be reported to the credit bureau. And you can start building credit.

You may also be able to get a small loan through your bank if you put the total amount of the loan in savings and use this as collateral. You can ensure that you pay it off by setting up automatic payments from savings.

You will have to make one last payment out of pocket, which will be the interest accrued. If that’s a price you are willing to pay to build credit, this is an excellent way to do it.

Don’t Close Accounts After Paying them Off

When you have successfully paid off a card (Yay!), the natural thing to want to do is to close the account. That way you won’t have it in your possession to rack up more debt.

Don’t do this. When you close an account in good standing with no balance, this increases your credit usage ratio. Which we’ve already learned can have a significant impact on your credit score.

Keep these accounts open and cut up the cards, if you must, to resist using them.


Now that you have your method in place, just sit back and wait. You’ll see your credit score go up each month.

To have full access to your credit score, you can download an app like Credit Karma. This app will track all your credit accounts and your credit score. It also helps you learn new ways to keep your credit in good standing. 

Author Bio

SusieSusie is our General Manager and has been with Copper Beech for ten years! Susie is a huge asset to our team. In Susie’s spare time she enjoys spending time with her family, her three boys, and her dog Gunner.

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