How to repair your credit score in 6 steps
May 6, 2025
•10-minute read
Excited about purchasing a home? A high credit score gives you several advantages when you’re ready to buy, including lower mortgage rates. A lower credit score, on the other hand, could make getting a mortgage and buying a home trickier.
The credit score required to buy a home depends on the type of loan you’re applying for. But the higher your score is, the easier it will be to get a mortgage. That’s why it’s important to check and repair your credit score if necessary before you start shopping for a home to buy.
Here are six tips to help you improve your credit score:
- Check your credit report often and look for errors.
- Focus on small, regular payments and control your spending.
- Reduce your high-balance accounts and use credit cards sparingly.
- Consider a debt consolidation loan.
- Work with a credit counseling agency.
- Build toward a target credit score.
What is a credit score?
A credit score is a three-digit number ranging from 300 to 850 that tells a lender how responsible you are when borrowing money. A high credit score shows lenders you pay your bills on time, and you don’t borrow more than you can pay back.
A low credit score indicates you may be a credit risk. Lenders see that you may miss payments, overextend your line of credit regularly, your account is very young, or your spending habits are unpredictable.
Equifax®, Experian™, and TransUnion® are the three major reporting bureaus that gather data on your spending habits and calculate your credit score.
Each bureau can play a role in how your credit history is assessed. Mortgage lenders often order a tri-merge credit report, combining reports from the three bureaus into one, to help assess how qualified you are for a mortgage.
“People often misunderstand a credit score as a measure of overall financial health. It’s not,” says Chris Fohlin, founder of Fohlin Financial Coaching in Houston. “A credit score reflects how well you handle borrowing and repaying money. Credit scores matter most when you have an upcoming need to borrow money or enter a long-term financial relationship like renting an apartment.”
How can you learn more about your credit score?
Your credit score can be found in a variety of ways. You may purchase it from Experian™, Equifax®, or TransUnion®. There is also a good chance that your credit card company or bank offers free credit scores, either on your statements or upon inquiry.
“Some lenders and banks give you free access to your credit score just for being a customer. Some apps and sites offer free scores, although they often push add-ons or upsells,” says David Kindness, a San Diego-based personal finance expert and certified public accountant.
Though your annual free credit report will not include your credit score, it provides in-depth information essential to improving your financial situation. Under the Fair Credit Reporting Act, you’re entitled to a free pull of your credit report from each of the three major credit reporting bureaus once a week. You can view your fee credit report by visiting AnnualCreditReport.com.
How is your credit score determined?
Each bureau may give you a slightly different credit score depending on which lenders, collection agencies, and court records report to them, but your scores should all be similar. The most common type of credit score is the FICO® Score, created by the Fair Isaac Corp., which lenders use to help decide how risky it might be to lend money to someone.
The following is a rough breakdown of how FICO® credit scores are calculated.
- Payment history (35%): Your payment history includes factors like how often you make or miss payments, how many days on average your late payments are overdue, and how quickly you make an overdue payment. Each time you miss a payment, you hurt your credit score. “Even one late payment that’s more than 30 days late can have a significant negative effect on your credit score,” says Sean Salter, associate professor of finance at Middle Tennessee State University.
- Current loan and credit card debt (30%): Your current debt comprises factors like how much you owe, how many and the types of cards you have, and how much credit you have available. Maxed-out credit cards and high loan balances hurt your score, while low balances raise your score – assuming you pay them off.
- Length of your credit history (15%): The longer your credit history, the higher the probability that you’ll follow the same credit patterns. A long history of on-time payments improves your score, so it can sometimes be beneficial to leave accounts open if you’ve paid them off.
- Account diversification (10%): Creditors like lending to borrowers who have a mix of account types, including home loans, credit cards, and installment loans. “If you demonstrate that you can successfully and responsibly use different types of credit – including installment loans and revolving accounts – you are much more likely to have a high credit score,” Salter says.
- Recent credit activity (10%): When you open several credit cards or request a sudden increase in credit, it suggest to creditors that you’re in financial trouble. Don’t apply for multiple accounts at once, or your credit may take a hit.
How to improve your credit before buying a house
After you know your score and understand how it’s calculated, here are some steps you can take to up your credit score before a home purchase.
1. Check your credit report for errors
You can access your three credit reports from Experian™, Equifax®, and TransUnion® for no charge at AnnualCreditReport.com. Many people have errors on their credit reports and don’t know it. These errors are rarely beneficial and can lower your score.
Some of the most common errors include:
- The inclusion of accounts that don’t belong to you.
- A report that a closed account or a paid-in-full loan is still open.
- A report that inaccurately lists a missed or late payment.
- The inclusion of outdated credit-utilization information.
Before you start a credit repair plan, make sure that your low credit score isn’t the result of a mistake. Pull each of your credit reports and carefully check each one for errors. Your credit reports include instructions on how to report errors.
If you notice something you believe is an error, your credit bureau must investigate any dispute that you make and report their findings back to you. Furnishers – such as your bank, credit card company, or landlord – that provide information about you to the credit bureaus generally must investigate and reply to your dispute within 30 days of receiving the dispute. This can extend to 45 days if you submit extra information after the initial 30-day period. If the investigation finds the information about you is wrong or can’t be verified, the company that provided it must fix or delete it and let the credit reporting companies know, which will eventually raise your credit score. If they decide the information is correct, you can ask the credit reporting companies to add a statement to your credit report explaining your side of the dispute.
“A good strategy is to spread out your credit report requests from the three bureaus so that you get one updated credit report from one of the three bureaus every four months or so,” Salter says.
2. Focus on small, regular payments
Your payment history is the biggest single factor that makes up your credit score because it comprises about 35% of your score’s calculation. This means that one of the quickest ways you can raise your score is to make minimum payments on all your accounts every month.
“You don’t need to pay everything off all at once. Regular on-time payments build a stronger credit history, which helps push your score up,” Kindness says.
Ideally, you should pay off each of your outstanding credit card balances before they’re due. This lowers your revolving utilization and helps you save on interest in the long term.
Most credit card companies allow you to set email or text alerts when a minimum payment is due and you can schedule automatic payments with most credit cards.
If you have credit cards you don’t use, resist the temptation to close them. Closing credit lines lowers your available credit and increases your revolving utilization percentage. Instead, charge a small item – like a cup of coffee or dinner – once a month and pay the bill in full immediately.
3. Reduce your high-balance accounts
You’ll see your credit score rise if you reduce the amount you owe on your credit cards. Your revolving utilization makes up 30% of your credit score, so it’s worth it to put any extra money in your budget toward debt reduction.
You can help reduce high balances via the following best practices:
- Employ the snowball method. “Start with your smallest debt, paid off, then roll that payment amount into your next smallest debt, and so on. I’ve watched people’s scores climb 100-plus points in six months using the snowball method,” says Tampa, Florida- based personal finance expert Andrew Lokenauth.
- Use the debt avalanche method. Alternatively, give priority to first repaying debts with the highest interest rates. Salter says this requires making minimum payments on all your debts and designating any extra dollars toward the single debt with the highest interest rate. After that debt is repaid, roll over your extra dollars toward your next highest-interest debt, and so on, until you’ve eradicated all your debts.
- Keep your credit utilization low 30%. “Ideally, keep it under 10%. One of my clients paid down their credit cards from 90% credit utilization and saw a 70-point credit score increase,” Lokenauth says.
- Focus on first repaying accounts that are close to maxed out. “These accounts weigh more in how your credit score gets calculated,” Kindness says.
4. Consider a debt consolidation loan
A debt consolidation loan or balance transfer combines your outstanding debts into a single loan with one monthly payment. This can improve your credit utilization rates and can help you avoid missed payments. Consolidating debt can be a great option for you if you have multiple lines of credit that you have trouble keeping up with.
“Consolidating debt via a loan can help improve your credit scores in two major ways. First, consolidation can help with debt management by, instead of making multiple payments to multiple creditors, combining your debt into one payment made to one creditor. This simplification makes it easier to make your payments on time,” Salter says. “A second way it helps is if you can consolidate at a lower interest rate than is currently being paid on the multiple individual credit accounts that can be consolidated.”
A hard inquiry appears on your credit report when you apply for a debt consolidation loan, which causes your credit score to drop by a few points immediately after your inquiry. Focus on making on-time payments above the minimum required amount after you get your debt consolidation loan to make up for this effect.
5. Work with a credit counseling agency
Credit counseling agencies can help you analyze your finances and find realistic solutions for your debt and credit issues. Be picky if you decide to work with these types of companies. Ask about fees, specific pricing, services, and products and avoid companies reluctant to provide up-front information on their pricing structures or debt-reduction tactics. You can find affordable and reputable assistance from a nonprofit credit counselor through the National Foundation for Credit Counseling.
“Credit counselors can educate you about credit scores and ways to improve them, providing hands-on support like building a debt management plan and negotiating with your credit card companies for better terms,” Fohlin says.
Be careful with about credit ‘repair’ companies
Credit counselors are different from credit repair services. Counselors focus on debt management and reduction, while credit repair services focus mostly on credit scores, Fohlin says.
“There are many unethical repair services that promise to remove accurate information from your report or require payment upfront before delivering results,” he says.
Lokenauth suggest bypassing credit repair companies and sticking with trusted credit counseling agencies instead, including nonprofits like the National Foundation for Credit Counseling.
“I’ve had too many clients get burned by sketchy credit repair companies charging hundreds per month with empty promises,” he says. “They often use illegal practices like filing false disputes.”
Some credit repair companies go as far as disputing true information or telling clients to lie or create fake identities, which can get you into legal trouble, Kindness says.
6. Build toward a target credit score
Once you know your score and the steps you need to take to repair it, you can then decide on a plan to see how aggressively you should try to improve your score. While ranges will vary slightly between the FICO® and VantageScore® 3.0 score models, 850 is the highest possible credit score for both.
“There are ranges for credit scores,” Fohlin says. “Rather than trying for a perfect score of 850, it can feel more realistic to focus on reaching the next threshold to become more qualified. For example, if you’re looking to get a mortgage loan or car financing, you should aim for a credit score of 700 or higher to help you qualify and get a more comfortable interest rate.”
You typically need a minimum credit score of 620 for a conventional mortgage loan, 500 – 580 for an FHA home loan, and around 640 for a USDA home loan. VA loans don’t have a minimum credit score.
Improving your credit score FAQs
Have some “how to repair credit score” questions? We’ve got answers to some of the most common queries consumers have.
Is it worth paying someone to fix your credit?
Truth is, most people can fix their credit themselves without paying someone to help. There are credit repair services available, but the experts caution against using them because they tend to charge too much and some engage in unethical practices. Instead, use the tips in this article to repair your credit score, and enlist the assistance of a non-profit credit counseling agency if necessary.
Is it true that after 7 years your credit is clear?
In general, most negative information – such as late payments – will roll off your credit reports after 7 years. But there are some types of debts, like tax liens or a Chapter 7 bankruptcy, that may remain on your credit report for 10 years.
Is 650 a good credit score?
A 650 credit score is regarded as “fair.” With this score, you might get approved for credit, but the terms and interest rate won’t be ideal. In general, a good credit score falls in the 670 – 780 range, which is considered “good” to “very good.”
How long does it take, in general, to repair your credit scores?
Credit scores are easy to damage but trickier to repair. Even when you repay your debts, it could take months for that information to report back to the credit bureaus. Missed payments can remain on your credit report for up to seven years. If you are eager to purchase a home with financing, you should start working on credit score improvement well in advance. The experts say repairing your credit score could take anywhere from 3 – 6 months to a few years, depending on how much your credit has been damaged.
The bottom line: Repairing your credit score takes work
Whether you’re looking to finance a home or take out another type of loan, it’s a good idea to try to repair your credit. Fixing your credit score doesn’t happen overnight, but there are plenty of small steps you can take every day to fix and maintain a solid credit score.
Ready to get started on your homebuying journey? Begin the approval process with Rocket Mortgage® today.

Erik J. Martin
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