How to rebuild your credit

If you’re working to rebuild your credit, you’re not alone. According to Experian®, nearly 1 in 3 people in the U.S. has what’s considered subprime credit scores. This generally means a score below 670. The good news is that with work, planning and responsible financial behavior, you should be able to improve your credit scores.

With better credit scores, you could make yourself more attractive to lenders when you apply for things like credit cards, mortgages and car loans. Here are a few ways you can responsibly rebuild credit and potentially improve your creditworthiness.

Key takeaways

  • It’s possible to rebuild credit with responsible use, like paying bills on time, managing your credit utilization and only applying for credit you need.

  • Becoming an authorized user or getting a secured card could help show your ability to repay debt.

  • While reviewing your credit reports alone doesn’t help your credit, it could help you understand what affects your scores and spot any errors.

  • There are certain actions—like using a prepaid card or debit card and taking out payday loans—that typically won’t help your credit scores.

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9 ways to help rebuild credit

An important first step in rebuilding your credit is having a plan. And while every person’s situation is different, there are some helpful strategies to consider.

Here are nine tips that could help you rebuild your credit:

1. Review your credit reports

Your credit scores are affected by numerous factors, including your credit history. On their own, reviewing and monitoring credit doesn’t help rebuild credit. But knowing what’s on your credit reports will help you figure out exactly where you stand.

A good first step is visiting to request free credit reports from each of the three major credit bureaus: Equifax®, Experian and TransUnion®. If there are errors on your reports, they could negatively affect your credit scores. But you have the right to dispute errors or incomplete information on your reports.

2. Pay your bills on time

Paying all your bills on time may be easier said than done. But your payment history is a main driver of your credit scores. And negative information in your payment history—like missed or late credit card payments—could affect your credit scores for years. Missing payments could have other consequences, too, like late payment fees.

Older negative information may count less than more recent information. So the longer you pay your bills on time, the better it is for your payment history. And the better it could be for your credit scores.

You might consider setting up a budget, automatic payments or reminder alerts to help you keep up with your bills. And making at least the minimum payment on credit accounts—like your credit card—will keep your accounts current and in good standing. But keep in mind that paying only the minimum could cost you more money in the long run and have other effects on your credit scores.

3. Catch up on overdue bills

If you have bills that weren’t paid on time and are past due, you’ll want to get caught up. And if you’ve fallen behind on your credit card payments, there are several steps you can take.

You could consider contacting your lenders if you’re struggling to keep up with your bills. They might be able to help you with a payment plan. And if you’re a Capital One customer having trouble making payments, you can contact Capital One to discuss your options.

4. Become an authorized user

If you have a loved one or someone you trust with good credit scores, they can add you as an authorized user to their account. This allows you to make purchases on their card account. The primary account holder is ultimately responsible for payments. And their responsible use can help rebuild your credit and boost your scores. Plus, there’s generally no credit check or need to apply to be an authorized user.

Be sure to check with the card issuer to see how they handle reporting authorized users to credit agencies.

5. Consider a secured credit card

As you’re working your way to better credit, a secured credit card may be helpful. You can make purchases with it, just like a traditional credit card. But it requires you to put money down as a security deposit to open the account.

When you have a secured card, some credit card companies, like Capital One, report your status to the credit bureaus. So if you’re making at least your minimum payment on time and using your card responsibly, it could help you improve your credit.

6. Keep some of your credit available

How much of your available credit you use is called credit utilization. And keeping your credit utilization below 30% can show you’re managing your credit responsibly and not overspending. Try to avoid maxing out your credit cards and pay down any balances that you’re carrying. 

You may even consider paying off your card balance the same day you make your purchases—or as soon as possible—to help you keep your available credit as high as possible. This can help you keep your credit utilization ratio lower—and may help you boost your credit scores over time.

7. Only apply for credit you need

Applying for new credit accounts can cause your scores to drop temporarily. That’s because lenders typically run a hard credit check. Your credit scores might be negatively affected by too many hard credit checks in a short period of time.

8. Avoid closing old accounts

Every credit line you have contributes toward your total available credit. The higher your total available credit is, the easier it can be to maintain a lower credit utilization ratio. If you have credit cards that you no longer use or use infrequently, consider keeping them open anyway. This way, those cards will be factored into your total available credit, whether you use them or not.

9. Stay on top of your progress

As you work on rebuilding your credit scores, you might consider using a credit monitoring tool like CreditWise from Capital One. It’s a tool for everyone—not just Capital One cardholders. You’ll get alerts when there are meaningful changes to your TransUnion credit report. And you can always see your VantageScore® 3.0 credit score to keep an eye on your progress. Using CreditWise alongside to view your credit reports can help you make sure you’re on the right track.

Credit rebuilding FAQ

If you’re still learning, here’s more information about rebuilding your credit:

The Consumer Financial Protection Bureau (CFPB) lists the following factors that can impact your credit scores:

  • Payment history
  • Amount of debt
  • Age of credit history
  • Credit utilization
  • Credit mix
  • New credit applications

Learn more about what affects your credit scores.

Rebuilding credit can take time. And just how long it takes to rebuild credit depends on your circumstances. Things like your credit history and current scores play a part in how long it takes to rebuild credit.

The good news is that most things won’t impact your scores forever. And the effects of negative factors may decrease over time. Being patient and forming good financial habits can pay off in the long run.

Even if you’re just starting out, it may be worth researching credit cards. With responsible use, you could use a credit card to help rebuild your credit.

These are a few different ways you can use a credit card to build credit:

  • Pay your statement on time each month.
  • Use only the credit you need.
  • Stay below your credit limit.

It’s helpful to check your credit card statement and flag any transactions you don’t recognize. You can also monitor your credit with a free service like CreditWise.

There are certain activities the CFPB says won’t help rebuild your credit, including:

  • Paying with cash or a debit card
  • Using a prepaid card
  • Getting a payday loan
  • Taking out a “buy here, pay here” auto loan

Rebuilding your credit in a nutshell

Building better credit takes time, but it’s possible with responsible financial behavior. And it’s never too late to get started. Capital One offers credit cards that may help people with all types of credit histories and scores improve their credit.

If you’re unsure which card might be a good fit, you can find out first whether you’re pre-approved for a Capital One credit card with no impact on your credit scores. Getting pre-approved can help you better understand your options and could give you an idea of which credit cards will work best for your situation.

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