Credit repair: What is it & how does it work?

If you have less-than-perfect credit, you may be wondering whether it’s possible to repair it. And there’s good news: You can.

But why is repairing your credit important, anyway? How long does it take to repair credit? And how exactly can you do it? Read on to learn the answers to these questions and more.

Key takeaways

  • The healthier your credit, the more attractive you may be as a borrower.
  • Repairing credit can take time.
  • Credit repair scams are common.
  • There are steps you can take on your own to improve your credit and begin using credit responsibly.

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Why is credit repair important?

Repairing credit and improving credit scores is important since scores reflect creditworthiness and are used to predict how likely a person is to pay their debts on time.

Credit scores can affect credit limits and interest rates. They can even affect other things too. For example, landlords may check credit scores as part of rental applications. Credit may also be considered by insurers when determining premiums. And utility providers and cellphone companies may waive security deposits if they see good scores.

Ultimately, the healthier a borrower’s credit reports and scores are, the more attractive they may be to lenders.

How long does it take to repair credit?

Credit repair can take time. There are no shortcuts. And just how long it takes to repair and rebuild credit depends on an individual’s own unique circumstances. Things like current credit scores, factors affecting those credit scores and more all play a part in how long it may take.

Most things won’t impact your score forever, thankfully. And the effects of negative information may lessen over time.

Are credit repair companies legit?

If you’re rebuilding your credit, you may come across credit repair companies that offer to do things like analyze credit data, provide a credit consultation and even send dispute letters on your behalf.

But here’s what you should know before considering a credit repair company:

Credit repair scams are common

Unfortunately, credit repair scams are common.

As the Consumer Financial Protection Bureau (CFPB) explains, credit repair companies are forbidden from accepting upfront fees and using deceptive practices. So if a company pressures you to pay before it provides any services, this may be a warning sign that it’s a scam. According to the CFPB, other warning signs include:

  • Promising to remove negative information from your credit reports—even if the information is accurate and current
  • Avoiding or refusing to explain your rights to you and what you can do for free
  • Recommending that you don’t contact the credit bureaus directly

Beware of credit privacy numbers

A credit privacy number (CPN) is a nine-digit number that’s formatted like a Social Security number (SSN). But a CPN isn’t a substitute for an SSN—even though it’s often marketed as such. Scam artists market CPNs as a way to hide poor credit or bankruptcies—or to use in place of an SSN when applying for new credit.

Selling CPNs as a way to repair credit is illegal. And many companies that sell CPNs get these numbers by stealing the SSNs of unsuspecting victims and presenting them as CPNs instead.

Using a CPN on a credit application can even put you at risk of committing identity theft.

What credit repair scam victims can do 

If you suspect you’ve fallen victim to a credit repair scam, you can file a fraud report with the Federal Trade Commission, your state’s attorney general or a local consumer affairs authority.

There are reputable credit counselors who can help

As the CFPB explains, there are reputable credit counseling organizations that “can advise you on your money and debts, help you with a budget, and offer money management workshops.” They’re usually nonprofit organizations, and their counselors are typically certified and trained to “discuss your financial situation with you and help you develop a personalized plan to solve your money problems.”

The U.S. Department of Justice even maintains an online list of approved credit counselors.

How to repair credit

When it comes to repairing your credit, there are a number of steps you can take on your own:

Pay bills on time

When it comes to maintaining or improving your credit scores, your payment history is an important credit-scoring factor. So catching up on missed and late payments can be an important step in rebuilding your credit. Setting up automatic payments can even help you make future payments on time.

Stay well below your credit limits

Credit-scoring models pay close attention to your credit utilization ratio and consider how much unpaid debt you currently have across all of your accounts. The lower your credit utilization, the better it can be for your scores. That’s because a low credit utilization ratio could be a sign that you’re not overspending and are using your credit responsibly.

According to the CFPB, “Experts advise keeping your use of credit at no more than 30 percent of your total credit limit.”

Pay your credit card balances in full

Paying your credit card balances in full every billing cycle can help you pay less in credit card interest than if you carry over your balance month after month. And it can ensure that you stay well below your credit limits.

Apply only for the credit you need

Try to apply for credit only when you truly need it. As the CFPB explains, “If you apply for a lot of credit over a short period of time, it may appear to lenders that your economic circumstances have changed negatively.”

Consider a secured credit card

You might not be able to qualify for a traditional credit card if you’re rebuilding your credit. But a secured credit card could be an option. “With most of these cards, your credit line starts out small,” the CFPB explains. “You put an amount equal to your credit limit in an account as a deposit. As you show you can pay on time, your credit limit may grow and you may have your deposit refunded.”

Consider becoming an authorized user

Becoming an authorized user on a family member’s or friend’s account gives you access to that existing line of credit.

Many issuers report authorized users to the credit bureaus. And that could help you build credit if the primary cardholder has good credit and uses their card responsibly.

Regularly monitor your credit

Monitoring your credit reports and scores can help you keep track of your progress and show you where you stand. It can also help you spot errors and potential fraud attempts that may be hurting your credit.

One way to monitor your credit is with CreditWise from Capital One. CreditWise allows you to access your TransUnion® credit report and weekly VantageScore® 3.0 credit score—without hurting your score. You can even use CreditWise’s Simulator to explore the potential impact of your financial decisions before you make them.

You don’t need to be a Capital One cardholder to use CreditWise—it’s free for everyone.

You can also get a free copy of your credit report from each of the three major credit bureaus. Visit to learn how. 

Credit repair in a nutshell

If your credit isn’t in the best shape, it’s important to improve it. The better your credit, the more attractive you may be to lenders as a borrower. Improving your credit could help with things like rental applications and insurance premiums too.

But remember that repairing credit takes time—there are no shortcuts. And there are steps you can take on your own to improve your credit and begin using credit more responsibly.

We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.

Capital One does not provide, endorse or guarantee any third-party product, service, information, or recommendation listed above. The third parties listed are solely responsible for their products and services, and all trademarks listed are the property of their respective owners.

Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many credit scoring models. It may not be the same model your lender uses, but it can be one accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Some monitoring and alerts may not be available to you if the information you enter at enrollment does not match the information in your credit file at (or you do not have a file at) one or more consumer reporting agencies.

The CreditWise Simulator provides an estimate of your score change and does not guarantee how your score may change.

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