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How to Fix Your Bad Credit Score Fast: Best Companies to Help in 2019

by: Sean Michaels

Update: 10/2019

 

A lot of thought revolves around the words “credit score” nowadays. A person’s entire financial life revolves around it. When handled well, it can prove to be a boon but can quickly become a bane when mishandled.

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Steps to Fix Bad Credit

It is vital to monitor your credit score, to either manage it consistently or repair it when the need manifests itself. The sooner a bad credit score is repaired, the better, since it is a critical financial number that represents you and can and will impact your life.

What is a credit score?

A credit score is a three-digit number that tells a lender, or a creditor, all that they need to know about your financial behavior. The credit scores may fall somewhere between 300 and 950.

It sheds light on how likely you are to repay a loan or make timely payments. This becomes the major factor for a lender to accept or deny a loan or a credit application.

Banks and other lenders consider people with low scores as high-risk customers and may deny credit.

Why is there a credit score?

The poor credit scores in a person’s credit report are red flags for banks and lenders. It helps banks to avoid lending money to people who are already in too much debt, or people who have a history of non-payment.

In the olden days, banking was a personal experience. Money was lent against collateral, and everything was a secure process. However, as usage of credit cards increased, unsecured credit became common.

Though banks make a profit through unsecured lending, it is also a high-risk process. There may be cases where it might become difficult to recover the money lent.

The credit report system minimizes this risk by giving banks the access to a centralized source of information about people and their financial health.

What information does the credit report contain?

Your credit report is your financial identity. Apart from having general information like your name, address and Social Security Number, it has information about your financial life.

It has information on your payment history, borrowing, open credit accounts, and so on. The information in the credit report mainly comprises of:

  • Credit Inquiries: approval or rejection of credit applied for
  • Loan accounts: information about the lending bank, amount, time, amount payable monthly and payment history
  • Credit Card information: Issuing bank, credit limit, date of issue, payment history and the balance on the account as in the recent statement
  • Closed Accounts: Even after payments have been made and accounts closed, the information will remain on the report for up to seven years.
  • Collection Accounts: If the bank has charged off an account, and has sold it over to a collection agency, this information will also appear on the report
  • Public records: Liens, court judgements, and bankruptcy will also be a part of the report
  • Comments: comments can be added either by the customer to explain records, or can be added by the creditor as well

What happens when a person has a Poor Credit Score?

A person’s credibility as a borrower is in question when he/she has a poor credit score. Banks and creditors will think twice before extending a line of credit. Even if they do approve the credit, there may be a higher interest rate that will be charged to you and no one wants that.

 

How to Fix Your Bad Credit Score

It might be difficult to get a place to live in, find employment, rent a car, or get a cell phone, if the credit score is low since so many entities check your credit score. People with a bad credit score might also need to pay security deposits for services and utilities.

Insurance might become expensive due to higher premiums. Debt collectors might call and harass you constantly to recover payments. Overall, a bad credit score will undermine your quality of life.

How to Repair Bad Credit

Repairing credit is like losing weight. It cannot be done overnight. If shortcuts are used to repair credit scores, it could up costing you more and only delay a real solution to this issue.

 

Any company, or thing, that claims to repair your credit fast might come with more bad news than anyone would care to anticipate.

Maintaining a good credit score, or rebuilding a positive credit score involves managing credit responsibly over a period of time.

If the score has gone down, then the credit history must be checked and repaired.

How can a person fix Bad Credit?

The first step to fixing a bad credit is to understand the various components that give rise to it.

The best way to do it is to first order a credit report from one of the three Credit Reporting Agencies: TransUnion, Experian, and Equifax, and going through it. Once the various components are understood, Credit repair is then a matter of planning and skill.

Step 1: Understanding. Planning and Tips

Some of the elements on the credit report, which lead to the calculation of the FICO score are:

Payment History

This component contributes to 35% of your FICO score, and has all the information about your payment history on loans and lines of credit.

This component has the highest weightage on the credit report, and can make a huge difference to the credit score. However, negative comments related to missed payments, or delayed payments cannot be removed easily.

Tips to manage Payment History

Pay your bills on time. A delay of even a few days on a bill payment can negatively affect your credit score.

Paying back after missing a few payments can help make a positive difference to the score. If you pay consistently, the fact that you missed a few payments, or paid them late, will slowly fade away. The positive information will be testimony that you are now managing your credit well.

Pay off a collection account. But remember that the comment might stay on, for up to 7 years. Closing the collection account does not mean removal of the negative comment.

If you cannot make payments, instead of defaulting, contact your creditor, or a credit counselor, who can work something out, so the money can be recovered.

Amount Owed

This contributes to 30% of the weightage in the credit report. There are several tips that can be followed to better manage this section and to increase your credit score.

Pay most of the amount on the “outstanding balance” on credit cards. High debt can decrease credit scores.

Do not close unused credit cards, if you don’t have to. If there is an annual fee involved, please request for a plan that has no annual fees.

Do not open new lines of credit to increase your available credit limit.

Length of Credit History

If you are a new credit user, do not open too many new accounts in a short period of time. This will not only look risky but will also lower your FICO score considerably since the average account age gets lowered.

New Credit

Try and keep credit inquiries to a minimum. If you are doing rate shopping, try and finish it within a fixed time. Too many inquiries might also reduce your credit score.

Opening new credit accounts, and paying them off can slowly increase your financial credibility, even if there have been problems in the past.

Do not open new accounts only to have a credit mix. This might probably lower your score.

Public Records

Avoid getting public records into your credit report like liens, bankruptcy, or credit judgments. These can keep your score down for years.

Step 2: Identifying Errors in the Credit Report and Disputing Them

After understanding the above components, look for errors or inaccurate information. Mistakes might occur owing to the same last name, first name, and so on.

  • First check the credit report to verify if your name, Social Security number, address and credit history is right.
  • Review the list of outstanding debts, credit cards, and purchases. Highlight mistakes if you find any
  • If the mistake must be disputed, proof must be submitted. Gather all required proof.
  • A dispute can either be submitted online, or a letter can be written, along with all proof enclosed, and sent to the credit reporting agency whose report has the incorrect information.
  • The reporting agency has 30 days’ time to respond to the dispute from the date of receipt of the dispute.
  • Follow up with the agency judiciously.

Step 3: Corrective Action

After the errors have been corrected, it is time to assess if the scores are less because of your spending pattern.

Are you spending more than you can afford?

Having a budget, which lists out your income, and your expenditure for each month can help you plan your spending. Having a budget will not only help you plan the spending but might also help curb any impulse buying you may have in your system.

Step 4: Payment Agenda

Fixing/repairing bad credit means paying all the outstanding bills, before time. Setting reminders to make payments on time can help.

Another option is to authorize banks and lenders to automatically debit money from your bank account, to not miss any payment.

Paying bills, and on time, is one of the most effective ways to increase your credit score.

Step 5: Reduce Debt

Pay down the outstanding balances on your credit cards. Know your credit limit, and try and stay within those limits while spending.

Even after you finish paying these cards do not cancel them. The total amount of available credit makes a difference to the credit score, even if there is no outstanding balance.

Another way to do this is to check the list of all credit card accounts from the credit report. Check the interest rates on these cards. Start by paying off the cards that charge you a higher interest rate, while paying the minimum balance on the other cards.

Step 6: Do not Open New lines of Credit

Do not open new lines of credit, even if they come coupled with offers. Each time a person applies for credit, there is a “hard inquiry” that goes on file. Too many such inquiries within 2 years might pull down the credit score considerably.

It is very important for people to know their credit score, to know where they stand, as far as their financial health is concerned.

Free tools like freecreditscore.com send e-mail alerts to inform people using their site about change in credit scores.

Monitoring the credit score regularly can help people identify inaccuracies, and take corrective action sooner than later.

The steps mentioned above should help people repair their credit, and start building a positive credit history. However, even with all the tips mentioned above, if people are struggling to get a credit card or loan, there are a couple of other options.

  • You can become an authorized user on someone’s account, like your father’s, mother’s, spouse’s,
  • Have a cosigner to work with you. However, the flip side is that the cosigner also becomes liable for your debt.
  • Opening a secured account. This is more like a debit account, where you deposit a certain amount in the account, and the card issuer allows you to borrow up to a certain percentage of money.

Despite these steps and options, if you are still struggling, getting assistance from a credit counseling agency would be better.

What are Credit Counseling Agencies?

An approved credit counseling agency can help a person pay down debt, and help him/her manage their finances. Their main objective is to help the borrower avoid bankruptcy. They also educate the borrowers on basic financial management.

 

They sometimes negotiate with creditors, to reduce the interest rates and late fees for the borrowers. The US Department of Justice has approved several credit counseling agencies in each state. This ensures that the people are taking assistance from legitimate agencies.

Managing a good credit score is a lifelong exercise. If, however, the scores have been affected, due to various reasons it is never too late to repair them. You can repair your credit yourself or hire the expertise of a credit repair company.  A fixed/repaired credit is better than a bad credit, any day, both for the borrower and the lender.

FAQ

General Questions

In this frequently asked question section, you will find general questions pertaining to general fixing your credit.

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How to fix my credit?
The best way and simplest way to fix your credit is to:

  • Review your credit report.
  • Dispute any negative standings on your credit.
  • Dispute late payment entries.
  • Work with credit repair companies that will help to fix your credit.
  • Pay credit payments on time.
  • Increase your credit limit.
How to fix bad credit?
The best way to fix bad credit is to:

  • Check your credit report.
  • Arrange to make payments on outstanding credit balances.
  • Pay your credit bills on time.
  • Avoid closing credit card accounts
  • Pay down the credit card debt you have in time.
  • Apply for a secured credit card.
  • Pay the balance off the secured credit card routinely.
How to fix bad credit for free?
The best way to fix bad credit for free is to:

  • Set up a payment plan to pay off any existing balances on credit cards.
  • Open a secured credit card meant for those with bad credit.
  • Pay the credit card bill on time every month.
How to fix my credit myself?
The best way to fix your credit yourself is to:

  • First figure out where your credit currently stands.
  • If you find errors on your credit report, be sure to dispute them.
  • Ensure you are not spending more than you can pay each month.
  • Pay all of your bills on time.
  • Pay down any existing credit card balances.
  • Avoid applying for new credit lines.
How do I start fixing my credit?
In order to start fixing your credit, you will need to first pull your credit report to have an understanding of where your credit stands. Then you will need to figure out if you want to hire a credit repair company to fix your credit or handle it yourself. Depending on the option, you will then have to arrange payments to existing credit balances.
How to fix a default on your credit file?
The best way to fix a default on your credit file is to first get a copy of your credit report. Then you need to identify the default marks on your credit. Once you identify the default marks, you will have to pay any of the default errors in full if they are legitimate. However, keep in mind defaults on your credit report will remain for up to six years.
How to fix bad credit with charge offs?
To fix bad credit with charge offs you will first have to talk to a creditor regarding the charge off. It is best to talk to the original creditor of the charge off and come up with a method to pay it off.
How to fix credit after a car repossession?
To fix your credit after having a car repossession, you will want to negotiate with the original auto lender to discuss your financial situation and potentially set up a payment plan. Next consult with an attorney to measure your options of repayment. Then sign up for a secured credit card and make consistent payments to rebuild your credit over time.
Where can I fix my credit?
There are two ways you can fix your credit: doing it yourself or working with a credit repair agency. A credit repair agency is perfect if you don’t want to put in the work to consolidate your credit into one easy lump sum payment. However, if you want to save money, repairing your credit yourself is the best way to go.
Where can I get help to fix my credit?
There are many places where you can get help to fix your credit such as:

  • A credit repair agency-helps to consolidate all of your debt into one easy monthly payment.
  • Doing it yourself-more time consuming and expensive
  • Consulting a lawyer-can help negotiate with creditors and work on coming up with a payment plan on your behalf.
Who do I call to fix my credit?
The best people to call to fix your credit are:

  • Creditors-the main people behind your existing debt. It is best to call an original creditor to set up a payment plan directly.
  • A credit repair agency-can call multiple creditors on your behalf and help to set up a payment plan to erase existing credit debt in one monthly payment.
Can you fix your credit after a repo?
Yes. It is possible to fix your credit after a car repossession. In order to do so, you will have to first pull your credit report, contact the original auto lender and pay off the existing balance on a financed, leased or purchased vehicle. Once you do that, you can fix your credit by using a secured credit card and paying the monthly bill on time.
How much does it cost to fix my credit?
The amount it can cost to fix your credit will be dependent on how much debt you currently have and if you go the route of fixing your credit yourself or through a credit repair agency. The cost for fixing credit can start at $14.99 a month to as high as a few thousands depending on these factors.
How to fix a poor credit score?
In order to fix a poor credit score, it will be a bit more difficult than it would be for bad credit. For poor credit, all existing debt will have to be paid off completely and any default marks will have to be removed from your credit report. Once your debt has been paid off, it is best to use a secured credit card to rebuild your credit slowly.
How to fix credit after foreclosure?
The best way to fix your credit after a foreclosure is to:

  • Make sure that you keep all of your current credit accounts up to date.
  • Seek professional help from a credit repair specialist.
  • Apply for a secured credit card and pay the balance off on time each month.
  • Don’t take out any new loans.
  • Adjust your daily, weekly and monthly spending habits.
How to fix credit to buy a house?
In order to fix your credit to purchase a house, you will need to pay off as many outstanding credit debts you currently have. Then continue to pay off any existing bills on time. Once you are ready to purchase a house, seek out a broker and apply for a pre-approval certificate.
How to fix credit with collection accounts?
In order to fix your credit with collection accounts is to contact a credit agency directly and pay off any existing debts with them immediately. If you can’t pay off the debt, set up a payment plan with payment you can make on time every month. Once the debts have been paid, reach out to the collection agency to remove the collection entry from your credit report.
How to fix your credit before buying a home?
In order to fix your credit before buying a home, you will want to first pull your most recent credit report. Then you will need to have any existing debts removed from your credit report by contacting the credit lenders directly to settle any payments.
What can I do to fix my bad credit?
There are plenty of ways to fix your bad credit such as:

  • Paying off existing debt balances.
  • Using a secured credit card to help rebuild your credit over time.
  • Don’t take out any more credit lines.
  • Pay all of your bills on time.
  • Consult a credit repair history.
What should I pay off first to fix my credit?
The first thing you will want to pay off to fix your credit is the highest rate bad debt. This will allow you to get rid of the highest bill on your credit history and save more money doing so in the process.
Does Lexington law really fix your credit?

Yes. Lexington law works by ensuring creditors or credit bureaus work to comply with the law by ensure all information on your credit report is accurate and complete at all times. This can help ensure your credit begins to be fixed the moment you work towards paying off balances or existing debts.

How to fix a 560 credit score?
The best way to fix a credit score of 560, it is recommended that you consult a credit repair counselor that can help to remove any negative errors on your credit report and who can set up a monthly payment plan to pay off existing debts.
How to fix credit score after a late payment?
While there is no way to remove a late payment from a credit score, there are ways to improve your credit score after a late payment. First contact the original creditor to see if there is a way to remedy the late payment. If not, then work towards making all monthly credit payments on time going forward.
How to fix my credit after bankruptcy?
Once your credit account on your credit report will read “settled,” it is best to apply for a secured credit card to help start rebuilding your credit. Begin paying all of the monthly bills on time. Then monitor your progress over time.
Will filing bankruptcy fix my credit?
Yes. Filing bankruptcy can be a gateway to fixing your credit. Bankruptcy will remove any existing debt from collection agencies. However, keep in mind that if your credit score is already low prior to filing bankruptcy, it will only slightly boost it once bankruptcy has been settled.
Can I hire a lawyer to fix my credit?
Yes. While it is true you can hire a lawyer to fix your credit, hiring a lawyer can be extremely expensive. Between lawyer fees and endless waiting time, it is more beneficial to use a credit repair agency instead of a credit repair lawyer.
How to fix credit score with collections?
The best way to fix your credit score with collections is to remove any debt collections from your report. To do this, it is best to pay off any existing collections that you may owe. It is also recommended to call collection agencies directly if there is an error on your credit report to have it settled.
How to fix credit to get a home loan?
In order to fix your credit to get a home loan, you will have to have a credit score higher than 580. If your credit is lower than the required score, you can apply for a secured credit card, pay off the monthly balance on time and monitor your progress going forward. Also be sure to avoid taking out any more lines of credit in the meantime.
How to fix insufficient credit history?
The best way to fix insufficient credit history is to:

  • Pay all of your bills on time every month.
  • Use a secured credit card to slowly improve your current credit score.
  • Utilize a credit builder loan to increase your credit history to sufficient.
  • Take out a personal loan and pay it on time every month.
Will paying off my debt fix my credit?
Yes. Paying off any existing debt can help to fix your credit along with taking other measures to improving your credit such as paying all of your bills on time and avoiding taking out new credit lines until your credit is improved.
Can credit repair companies really fix your credit?
Yes. Credit repair companies specialize in fixing all levels of credit. Credit repair companies specialize in consolidating all existing debts into one lump sum payment and work to erase errors from your credit report.

How to Fix Your Credit – Timeframe

In this frequently asked question section, you will find questions pertaining to the timeline to fix your credit.

first
How to fix my credit score in 6 months?
The best way to fix your credit score in 6 months is to

  • Pay off all existing open collections.
  • Dispute items that have already been paid.
  • Obtain a secured credit card with a low limit and spend only as necessary on the card.
  • Create a spending limit for yourself.
How to fix credit fast?
There is no method to fix your credit overnight. Fixing your credit takes time. With that being said, the only way to fix your credit relatively fast is by filing a Chapter 13 bankruptcy which will eliminate any outstanding balances with credit lenders or collection agencies.
How long does it take to fix credit?
Fixing your credit can take between 3 to 6 months. Of course, this will be dependent on the severity of your credit rating. A lower credit rating will take longer than a year to remedy while a fair credit rating may only take a few months to improve.
How long does it take to fix bad credit?
With a credit score between 300 to 580, it can take anywhere from 3 months to a year to fix. This depends on the number of collections, unpaid debts and errors listed on a credit report.
How many years does it take to fix a credit score?
How long it can take to fix a credit score will depend on how low the credit score is. For a credit score filled with missed or default payment, it can take up to 2 years to remedy. If a credit rating has a history of bankruptcy, it can take up to 6 year or more to fix.
How can I fix my credit in 30 days?
In order to fix your credit in 30 days you will want to:

  • Pay off any existing credit balances until they are less than 30% of what you owe.
  • Pay off any existing collections accounts.
  • Raise your credit limits on your credit cards.
  • Charge only small amounts to inactive credit cards.
How fast can you fix your credit?
Nobody is able to fix their credit overnight. How fast you can fix your credit will depend on the amount of outstanding balances currently owed on your credit and the number of collections you have. On average it can take as little as 3 months to improve your credit.
How long does it take Lexington Law to fix credit?
On average, it can take Lexington Law between 2 to 3 months to significantly improve your credit. However, if you have poor or bad credit, it can take as long as 6 months or more to improve credit.
How to fix your credit in 3 months?
To fix your credit in 3 months, you will have to:

  • Pay off any existing debt with credit lenders or collection agencies.
  • Avoid opening new lines of credit.
  • Pay off any existing balances on existing credit cards.
  • Track your progress.
Can I fix my credit in 6 months?
Yes. It is possible to fix your credit in 6 months. This depends on how much debt you currently have on your credit and whether or not there are errors listed on your credit report.

Credit Repair and your Credit Report

In this section, you will find questions regarding repair errors or existing balances on your credit report.

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How to fix late payments on credit report?
The best way to fix late payments on your credit report is to:

  • Request a goodwill adjustment from the original credit lender.
  • Negotiate removal of late payments from your credit report by setting up automatic payments.
  • Dispute any inaccurate late payments.
What does fixed rate mean on credit report?
Fixed rate on a credit report often times refers to a line of credit with a lender that currently has a fixed rate, meaning that the interest rate doesn’t fluctuate for the entire period of the loan.
How to fix payment history on credit report?
In order to fix payment history on a credit report, you should:

  • Dispute any payment errors on your credit report.
  • Make sure to pay any existing credit lines on time each month.
How to fix discrepancies on a credit report?
To fix discrepancies on a credit report, you should:

  • Request a letter by certified mail from the original credit lender stating you have paid off the debt.
  • Raise an investigation with a credit reporting company to investigate specific discrepancies.
How to fix negative accounts on a credit report?
In order to fix negative accounts on a credit report, it is recommended that you:

  • Submit a dispute with a credit bureau.
  • Contact the original lender with a request to pay off the existing debt.
  • Dispute errors of negative balances with a credit reporting agency.
How to fix serious delinquency on credit report?
In order to fix a serious delinquency on a credit report, it is recommended:

  • Verify the age of the delinquency.
  • Send certified letters to the major credit bureaus reporting the age of the debt.
  • Contact the collection agency that holds the debt in order to pay it off.
How to fix too many inquiries on credit report?
The best way to fix too many inquiries on a credit report is to contact the original lender directly and point out that the inquiry was not authorized. You will receive a certified letter in the mail which can be sent to the major credit bureaus to remove the inquiries off of your credit report.
How to fix a judgement on your credit report?
The best way to fix a judgement on your credit report is to:

  • Request that a court validates the judgement.
  • Verify the information provided to you by the court.
  • Consult with a credit professional to have them remove the judgement.