Check your reports and fix mistakes
You can get free credit reports from Equifax, Experian and TransUnion every week at AnnualCreditReport.com. It's the only site authorized to give out the free reports required by law.
If something is wrong, like an account that isn't yours or a late payment you made on time, dispute it with the credit bureau and the company that reported it. Our credit score basics guide explains exactly what to include.
Use less of your available credit
Credit scores look at how close you are to your limits. The CFPB says experts recommend keeping your balances at or below 30% of your total credit limit. Paying your balance in full each month is even better, and it saves you interest.
Set up autopay so you never miss a payment
Payment history is the biggest factor in most credit scores. Setting up automatic payments for at least the minimum on every account, or turning on reminders, helps make sure nothing slips by. If you do miss one, get current as soon as you can.
Tools for starting or rebuilding
If you have little or no credit history, these can help you add positive history. Before you sign up, ask whether the company reports to the credit bureaus, and check the fees.
- Secured credit card: you put down a cash deposit, and that's usually your credit limit. Many let you move to a regular card after a stretch of on-time payments.
- Credit-builder loan: often from a credit union. The loan is held in a savings account while you make small payments, usually over six to 24 months, and you get the money at the end.
- Authorized user: someone you trust adds you to their credit card. The account's payment activity typically shows up on your report too, so this works best with someone who always pays on time.
- Rent reporting: positive rent payments can help build credit. Ask your landlord whether they take part in a rent reporting program.
No bank account yet?
A bank or credit union account makes it easier to set up autopay and to get a secured card. If you've had trouble opening one before, there are still options.
- Second-chance accounts: these are lower-fee, reduced-service accounts for people with past problems, like an account closed with a negative balance. Some banks and credit unions may ask you to pay old charges first.
- Bank On certified accounts: banks and credit unions offer these accounts to meet national standards, which include no overdraft fees, a low monthly fee and a small opening deposit of $25 or less. You can find them by state at joinbankon.org.
- Low-cost and checkless accounts: the FDIC's GetBanked page explains accounts with low or no monthly fees and debit-only accounts that decline a purchase instead of charging an overdraft fee.
Sources
- FTC: Free Credit Reports
- AnnualCreditReport.com
- CFPB: How do I dispute an error on my credit report?
- CFPB: How do I get and keep a good credit score?
- CFPB: Ways to start or rebuild a good credit history
- CFPB: Credit invisible checklist (PDF)
- CFPB: Want credit to work for you? (PDF)
- CFPB: Does late rent affect my credit score?
- CFPB: What is a second-chance bank account and who is it for?
- Bank On National Account Standards (PDF)
- Bank On: Certified accounts by state
- FDIC: GetBanked
General information, not legal, tax or financial advice for your situation.