Getting credit help | How to repair your credit when it’s really bad Roost
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Getting credit help | How to repair your credit when it’s really bad

A bad credit score will have a negative impact throughout all aspects of your life.  If you have experienced the incredible frustration of constant denials for rental or employment applications or are only eligible for things if you are willing to pay outrageous interest or insurance rates, you know what we are talking about.  Bad credit is a huge disadvantage that will hurt all your efforts to get ahead in life. And if you’re reading this you know you’ve got a problem and need help.  So let’s not waste time talking about how you got there but start helping you fix it.

How long does it take to rebuild credit?

Everybody’s credit history is unique. How long it takes to rebuild your credit will depend on three major factors — your credit score, the type of issues affecting it, and most importantly, your level of commitment.  This means you could see positive changes within just a few months and, with discipline, you can make a good jump in your credit range within a year.  For the more hardcore cases, the process of rebuilding severely damaged credit could take several years.

The most important thing you can do right now is not to wait another day to start rebuilding your credit score.

Need to repair your credit?

5 Steps to get you started on repairing your bad credit

Like any marathon, you need to pace yourself – don’t let the credit repair process overwhelm you.  We have laid out 5 basic steps to help you begin to fix your bad credit.

1. Assess your credit problems 

You can’t know what to do or how to fix it until you have all the facts.  There are three major credit reporting agenciesExperian, TransUnion, and Equifax. You need to get a copy of each of these reports. The Fair Credit Reporting Act (FCRA) legally requires that each of these agencies provide you with a free copy of your credit report every year.  You can request a copy of all three reports at AnnualCreditReport.com.

Do I need all three credit reports? Yes!  Different companies don’t necessarily report to each credit bureau which means you will find different credit information on all three reports.

Roost Tip! Use different color highlighters to mark different types of issues, such as revolving debt (credit cards), past due accounts, or items that you believe to be incorrect. This will help you organize for the next steps.

2. Get current on your past due accounts

Poor payment history, including late and missed payments, has the greatest negative impact on your credit score.  Get current on all your past due accounts.  Learn how to create a budget to help you manage your payments.  Generally, you will see a positive increase in your credit score within just a couple of months by getting current on all your payments.

Roost Tip! To ensure that missing or late payments are never a problem again consider setting up all your accounts on autopay.

3. Reduce your credit utilization ratio

This is a fancy phrase for measuring what % of your credit cards are maxed out. In other words, your total credit debt divided by available credit.  You should strive to keep your utilization ratio at 30% or under.

Credit Utilization Ratio Example

If you have access to $10,000 in revolving debt and owe $9000 on those same cards — your utilization ratio would be 90%.   That’s $9000/$10,000 x 100 = 90%.

To determine your credit utilization ratio add up all of the revolving credit available to you, divide it by the total amount of your actual revolving debt, and multiply it by 100. Now that you know your ratio it’s time to figure out how to reduce your number. 

  • Pay down account balances — you may want to consider a side hustle to bring in some extra cash during this process.
  • Consolidate revolving credit by taking out a personal loan – personal loans are not used to calculate your utilization ratio so if you are approved for a personal loan, transfer as much credit card debt as you can to this loan.  Transfer your highest interest rate cards first to save yourself the most money.
  • Increase your available revolving credit by requesting an increase in your credit limit or applying for a new credit card.  WARNING! If you don’t have the discipline to NOT use that extra credit this is not the option for you — you will just make things worse.  Plus, applying for a new credit card will be another negative ding on your credit score.
Roost Tip! Do not cancel credit cards in an attempt to rid yourself of revolving credit.  It may seem tempting —however, if you cancel a credit card that you don’t owe anything on you will increase your credit utilization ratio. That available revolving debt is actually helping to keep your utilization ratio down — so don’t touch it!  

4. Fix errors on your credit report

If you discover errors are pulling down your credit score you will need to file a dispute with the credit reporting agency and the company reporting the mistake.

You can file a dispute online or by mail.  Disputing online is faster, however, you may find that disputing credit errors by mail, is a better option that allows you to document when you mailed the dispute via certified mail, that your dispute was received with a return receipt request, and provide copies of all documents that support your dispute.  Keep copies of everything you send.

Credit reporting bureaus have 30-45 days to respond to your disputes — so no matter how you file your dispute — once your submission has been received the clock is ticking.  If you don’t hear back within 30 days, don’t wait, follow up on your dispute.  ‘Squeaky wheel theory’ here also applied with ‘you catch more flies with honey’ — be nice, be respectful — yelling at the person who just met you on the phone isn’t helping resolve anything.

5. Get your utility and rent payments reported

You may not know this, but your utility bills and rent payments can be used to help your credit score.  Call your utility companies and landlord to talk about having these payments reported to credit bureaus.  Just remember, make those payments on time!  This is an easy way to get some positive reporting for your credit score and get you on track to great credit.

Should I use credit help companies?

Credit repair companies can’t do anything for you that you can’t do for yourself and they can often be expensive.  So you should try repairing your credit on your own first.  However, if your bad credit issues are overwhelming, you are being harassed or threatened by creditors through phone calls and emails, or you just aren’t getting anywhere — they may be a good option for you.  

Here are a handful of the best credit help companies available.  Credit help companies either offer a service or product to help you correct and build your credit.  

Credit Saint offers a free first consultation to help you decide if they are right for you.  They will help you analyze your credit history for errors and dispute them for you, and, whenever possible, remove them from your credit report.  They also provide credit counseling to help you get the most out of your positive credit. This company charges a set up fee and monthly packages following. 

Credit Strong is a combination of a secured consumer installment loan and a savings account backed by Austin Capital Bank.  They deposit an amount into the savings account for you along with a loan payment program. Then, you make a single fixed monthly payment of principal and interest. The principal portion is credited toward your savings account and they keep the interest part as their fee. When the loan is paid in full, the lock on your savings account is removed and the money is yours. In the interim, they report your payments to all three credit bureaus, helping you build positive credit!

Like Credit Strong, Self. sets up a secured loan for you with a bank or credit union. You make your monthly payments on the loan for a period of time you select (6 months to 6 years) and the bank or credit union reports your payments to one or more of the three major credit bureaus to help build your credit score. Once the loan balance is paid off, the service provider unlocks your CD or savings account for you and you get the money minus interest and administrative fees.   

The Credit People will review your credit scores and analyze your history with you.  They will dispute issues on your credit for you as well as help you work on things that will increase your score. They offer a monthly or flare rat rate membership plans and a satisfaction guarantee. 

Here’s a more detailed table comparing each credit help company

Need to repair your credit?

Roost Tip! Beware of credit repair scams that charge you fees for little more than a google search and credit report.  You can also find reputable credit counselors through the National Foundation for Credit Counseling for free.

Here’s a quick (nontraditional) overview of how credit scores generally break out.  

  • 300 – 599: No bueno. Denied. Roadblocks to the present and the future. Serious steps are needed immediately.  
  • 600 – 700: Meh.  Feeling insulted every time you try to make financial progress by high-interest rates, high insurance rates, and high everything else.  Your credit score needs some serious nurturing.
  • Over 700: Woot! Getting approved for most loans and probably better than most of your friends — could be better — especially for us overachievers.
  • Over 800: Fantastic job! The world is your oyster..

What comes next in my credit repair journey?

Once you have begun to work on the basics of credit repair listed above — you should begin to see credit score improvements in just a few months.  What comes next will depend on your unique credit situation. The  most common dings to your credit score are: 

  • Late payments
  • High balances
  • Default accounts
  • Collection accounts
  • Charge-offs
  • Repossessions
  • Foreclosures
  • Bankruptcies

If you’ve got some of the bigger ticket items on your credit history you can read more about credit building and repair in our Ultimate guide to credit building.  

If you are struggling with bad credit you may also want to consider a few other things you can do to help repair your credit that are simply about increasing your cash flow.

If you start to wonder whether it’s even worth all the hassle, you will definitely need to read more about how credit scores can negatively impact all aspects of your life and watch Black Mirror’s ‘Nosedive’ on Netflix (seriously – every time her social credits go down, just replace it with your credit score). Don’t be surprised if it takes a long time to get yourself to a really great score. And, remember, be patient and don’t be discouraged if things don’t always go the way you hoped — with time and commitment you will see the positive credit repair changes that you are working towards which will, in turn, lead to financial progress and stability for your future. 

See if you qualify for a debt consolidation loan

Credit help and credit repair FAQs

1. Can a credit repair company really help?

Reputable credit repair companies can help you if you are drowning in bad credit problems.  However, they cannot do anything legally for you that you cannot do for yourself.  If you aren’t making any progress and need some help getting on the right track, give a company like Credit Saint or The Credit People a try. 

2. How can I fix my credit myself?

You bet! To fix your credit yourself start by ordering all three credit reports at Annuacreditreport.com. Next basic steps are to find and dispute all errors, get current on past due accounts, consolidate and pay down revolving credit debt, do not incur any new debt. From there you are on the right track.  Read our Ultimate Guide to Building Credit to learn more.

3. Is it worth it to pay someone to fix my credit?

It can be, but it really depends on your unique credit situation.  If your credit problems are overwhelming, then a credit help company may be right for you.  Be wary of scams, exorbitant fees, or overpromising results.  Here to see a few credit help companies that we feel are safe choices for you.

4. How can I get my credit score up fast?

Steps to get your credit score up fast. 1) Get all your past due accounts current and keep paying them on time moving forward.  2) Talk to your utility companies and landlord about getting credit for on time rent payments. 3) Pay off credit card debt and keep credit card balances low.  4) Consolidate credit card debt onto a personal loan to bring credit card balances down. 5) Apply for a secured credit card or credit building product.

5. Is there an ideal number of credit cards I should have?

Most people get by with two major credit cards.  Any more than that you risk abuse or reliance on credit cards to get by.  Too much access to revolving debt (credit cards) can be a negative on your credit score.  You also want to remember that your utilization ratio should stay under 30% or it will also reflect negatively on your credit score.

6. How quickly will negatives to my credit report be removed once I fix them?

Unfortunately, you will not see negatives removed from your credit report right away.  Expect a minimum of 30 days but don’t be surprised if it takes up to 90.  Also, be sure to keep an eye out on other reports to make sure the item doesn’t show up anywhere else.  If you are dealing with aggressive debt collectors this type of thing can happen.  Hang in there and keep at them. You will get them permanently removed. 

A quick note! Our goal is to gather and share info that’s up-to-date and helps you make great decisions as a renter. That said, the information you get directly from a provider could be a little different. Make sure to review their terms and conditions directly; and, if you see anything here that needs to be updated, please let us know! Advertising disclosure
Last Updated: September 24th, 2021