How to fix your credit

How to fix your credit

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Rebuilding your credit can be tougher than starting from scratch. You’re trying to show lenders and credit card issuers that despite slip-ups on your part or disasters you had nothing to do with, you’re very likely to make future payments as agreed.

Before you begin to rebuild credit, it’s important to know where your starting point is. Your credit score might not be as bad as you think. You can get a free credit score from NerdWallet, and track it. Once you know where you stand, you can begin to set some small, achievable goals for yourself.

How to fix your credit

The good news is, it’s possible to make significant progress quickly when you’re starting low. Even incremental improvement may give you better financial options than you have now.

Start by making sure errors on your credit reports aren’t holding you back. Correcting a big mistake in your report has the potential to add points quickly. If you've received forbearance or a deferral related to the coronavirus pandemic, it's important to check to be sure it's being reported correctly. And if you’ve been a victim of identity theft , checking your credit reports can tip you off. There are companies you can pay to dispute errors for you, but understand the pros and cons before you choose this option.

Go to to get a free copy of your credit reports. The three major credit reporting bureaus are offering free weekly reports through December 2022.

Make sure the information is correct. Look especially for accounts, amounts or addresses that you don’t recognize.

If you find an error, dispute it .

Then consider these six basic strategies for rebuilding credit:

1. Pay on time

Pay bills and any existing lines of credit on time if you possibly can. Paying only the minimum is fine, if that's all you can manage. If you see it's not possible to pay at least minimums, contact your creditor to see if other arrangements can be made, at least for now.

Why: Your payment history is the single biggest factor affecting your credit score . When you are rebuilding credit, you cannot afford to have a payment reported as late.

Late payments stay on your credit reports for up to 7½ years, so these take longer to recover from than some other credit missteps.

If some bills have already gone to collections, prioritize the ones where your account is still open. Collectors may make the most noise, but they aren’t your top priority.

2. Try to keep most of your credit limit available

“ Credit utilization ” is credit-speak for the percentage of your credit limit you’re using. The amount you use has a powerful effect on your credit score — only paying on time matters more.

Most experts recommend going no higher than 30% of the limit on any card, and lower is better for your score. Check the credit utilization for all your credit cards (you can do this by viewing your credit score profile from NerdWallet ) and focus on bringing down the highest ones. As soon as your credit card issuer reports a lower balance to the credit bureaus, your score can benefit. Your score will not be hurt by past high credit utilization once you’ve brought balances down.

3. Get a secured credit card

This product is typically for people who want to build credit from scratch . If your credit card accounts have been closed, you may need to start over with a secured credit card . These cards require a deposit upfront. That deposit is typically your credit limit, but then they work like any other credit card. Choose one from an issuer that reports payments to all three major credit-reporting bureaus.

4. Get a credit-builder loan or secured loan

As the name suggests, a credit-builder loan has one purpose: to help you improve your credit profile. You’re most likely to find one at a credit union or community bank . You’ll need to be a member or customer, and you’ll have to show proof of income and ability to repay. The lender holds onto the money as you repay, then releases it to you once you have fully repaid the loan.

If you have money on deposit, you might be able to borrow against that with a share- or certificate-backed loan. This is a type of secured loan, backed by money in your savings, money market or CD account. The bank or credit union puts a hold on the money until you repay. Some financial institutions release the funds incrementally as you pay down the balance.

Your payments are reported to the credit bureaus, so be sure to pay on time — a late payment will damage your credit.

5. Become an authorized user

You can ask someone to add you as an authorized user on a credit card. Your credit benefits just from being on the account; you don’t have to make any charges or access the account. A few cards allow primary cardholders to set spending limits for authorized users , which could make the account holder feel more comfortable about adding you. You could also ask someone to add you without actually giving you a card or card number.

Two things to be aware of: The impact on your score may be modest, because you aren’t legally responsible for debts on the account. And being an authorized user can also hurt your score if the account holder doesn’t pay the bill on time, so ask someone with good credit habits.

6. Get a co-signer

If you’re having a hard time getting access to credit, ask a family member or friend to co-sign a loan or credit card . This is a huge favor: You’re asking this person to put his or her credit reputation on the line for you and to take full responsibility for repayment if you don’t pay as agreed. The co-signer may also be turned down if they apply for more credit later because this account will be considered in assessing their financial profile.

Use this option with caution, and be certain you can repay. Failure to do so can damage the co-signer’s credit reputation and your relationship.

How long will it take to rebuild my credit?

Credit missteps and misfortunes do eventually fade into the past. The impact on your credit score and the time it takes to recover depends partly on how big the mistake was and how recent. Late and missed payments, judgments and collections stay on your credit reports for seven years. Bankruptcy can linger for up to 10 years.

However, you can begin repairing things right away. You should begin to see improvement as soon as you start accumulating positive credit information to help counter the big negatives. In time and as your credit score grows, you'll be able to consider new credit offerings that offer rewards and incentives to users.

Pick whatever strategy or combination of strategies works for your situation, then monitor the results. You can get a free credit score from NerdWallet. It updates weekly and allows you to see your credit score over time. You can check it to see how your efforts are paying off.

All too frequently you can turn on your television, read the newspaper or be online and see advertisements from companies claiming to be able to “repair your credit report” or “fix your credit history.” These companies often claim they can remove “black marks” from your credit report, or “clean” your report. This may be very enticing for anyone who has ever found themselves rejected for a credit card, a loan, or a mortgage because of defaults or other negative information on their credit report.

You should be wary of any organisation that promises to do these things. These credit repair companies often charge large fees for a service that most people can do themselves, for free.

They will often overstate their ability to improve a credit report, given that if information on a credit report is correct, it can’t be removed. There’s a good chance that you may end up thousands of dollars out of pocket without any real improvement in your credit report. Often they sign you up to contracts with unfair terms, such as big termination fees which penalise you for terminating the contract.

Defaults don’t last forever. They fall off your credit report after 5 years. In the meantime, you can still make yourself look better to credit providers by trying to pay off the default, and keeping up your repayments on any other loans.

Some credit repair services may also try to convince you to enter into insolvency arrangements which may not be suitable for your circumstances, or to consolidate your debts with a high-interest loan. Often these loans are either offered by the credit repairers themselves, or by an associated company. This may end up costing you more than if you had negotiated directly with your credit provider.

Steps to fix my credit rating

  1. Order a copy of your credit reports
  2. Check for errors and report any you find
  3. Pay bills on time, every time
  4. Clear up any debt defaults
  5. Pay off high interest loans so you can reduce your debt as quickly as possible.
  6. Reduce other debt
  7. If you have a credit card be sure to use it responsibly
  8. Check your free credit report/s, available every 3 months, to track your credit health

Help with “file fix”

The consumer safeguards in the Privacy Act and Privacy (Credit Reporting) Code require credit providers and credit reporting bodies to promptly investigate and respond to consumers’ correction requests about inaccuracies in credit reports.

You can also ask a financial counsellor or community legal services for advice. Financial counselling is free, independent and confidential.

You should remember, however, that information which is correct cannot be removed, so a credit provider or credit reporting body cannot be forced to remove that information to resolve a dispute with you.

Having trouble getting a new loan or credit? It may be because of your credit rating. It can be even more frustrating if the reason for your poor credit rating is because of incorrect information on your credit report.

The good news is you can get free access to your credit report and fix anything that is incorrect for free usually within 30 days. Westpac can help you do this for free.

The bad news, if the information is correct you may need to change some of your habits and wait for your credit score to improve. This may take a couple of years.

There are several ways to get free help for credit repair or to fix your credit rating. Beware of people or organisations who charge for credit fix solutions. They may be charging you for a service you can get done for free. Remember they cannot fix or remove correct information from your credit report.

What is a credit rating or credit score?

A credit rating or credit score is a number that lenders may use to help determine if they will lend you money. The credit score is generally based on your credit history as detailed in your credit report.

What is a credit report?

Your credit report is one of the most important financial assets you may have. A credit report contains personal identification details about you and a record of your credit history including loan applications and missed payments.

Credit reports and credit scores are kept by credit reporting bodies. The three main bodies in Australia are Equifax, illion and Experian. Different lenders may use one or more of these services. If you are applying for credit (for example, a phone or internet plan, credit or store card, personal loan, car loan, home loan, etc.), ask which service they are using and check your credit report. You can get your credit report for free once a year.

More information is available at

What information is on my credit report?

The information kept on your credit report is subject to the Privacy Act 1988 and the Privacy (Credit Reporting) Code 2014 (Version 2.1). has information on how credit reporting operates in Australia. It is maintained by the Australian Retail Credit Association (ARCA).

Your credit report is likely to contain information on your:

To help ensure the information relates to the right person.

Shows every application you have made for credit in the last 5 years even if you did not get the loan or service. It does not reflect whether the application was approved, declined, or withdrawn.

Consumer credit liability

Shows all credit facilities you have (or had) with participating credit providers which may include lenders, phone companies and utility (electricity and gas) companies. This information stays on your credit report for 2 years after the account is closed.

Showing you have made loan repayments to those credit facilities on time (or at least within 14 days) for the last two years. It will also show any late and or missed repayments more than 14 days overdue.

If you have missed a payment by 60 days in the last 5 years and the credit provider has attempted to collect from you, this may show on your credit report. It will also show if you have since made the payment.

Shows if a court has made a judgement against you in the last 5 years in relation to unpaid debt.

Shows if you have been bankrupt, entered into a debt agreement or other personal insolvency arrangements within the last 5 years.

Serious credit infringement

Shows if in the last 7 years a credit provider believes you fraudulently obtained credit or are avoiding paying back the money you owe.

Other publicly available information

if relevant to your credit worthiness.

As lenders and credit providers may use this information to decide if they give you credit, how much they may give you and how much they may charge you, it is important that this information is correct.

You can request a copy of your credit report for free once a year. It is a good idea to obtain a copy of it before applying for credit and checking everything is correct. Asking for a copy of your credit report is not recorded but applying for credit will be.

How do I correct my credit report?

If you believe you have errors on your credit report, you can get them corrected for free by:

1. Contacting the credit provider and requesting they correct their records. Credit providers are required by law to fix any errors once they become aware of them. If you do not have contact details for the credit provider, you may be able to find contact details on the “My credit file” directory provided by Equifax.

2. You can go directly to the credit reporting bodies who are required to fix the error within 30 days unless otherwise agreed by you. Their correction services can be found on their websites here:

To fix any error, the credit provider and credit reporting body must be satisfied that it is a genuine error. The credit provider will do an investigation into their systems and documentation, but any information you have could speed up the investigation. Information like:

  • A copy of your credit report highlighting the information you believe is incorrect.
  • Documents like receipts, bank statements, emails, loan documents, letters, account numbers.
  • Anything else you believe shows that an error has been made.

Once the error has been verified, your credit report will be corrected, and the credit reporting body will notify any credit providers who were provided with your report within 3 months of the correction.

If it is decided the information is correct, your credit report will not be altered, and you will be notified.

If you disagree with the outcome, credit reporting bodies and credit providers are required to belong to an External Dispute Resolution service. These are independent bodies who investigate complaints. The credit provider or credit reporting body will provide you their contact details as they do not all use the same service. There should be no fee for using this service.

If you are still unhappy with the result, you can contact the Office of the Australian Information Commissioner – the independent government agency that is responsible for looking after credit reporting.

How do I improve my credit score?

If everything on your credit report is correct, then how long does it take for your credit score to improve? It will take time. Your repayment history will stay on your credit report for 2 years. Most other information will remain for 5 years and some as long as 7 years.

However, each change that is made on your report through any positive action you take or as each negative piece of history drops off should see your credit score improve. The sooner you take credit repair action, the sooner your credit score will improve. You can monitor how your score improves through one of the following services backed by the main credit reporting bodies.

Thinking about applying for loan or credit? Then you’d better make sure your credit score is in order. A good credit score makes all the difference and can be a major factor in securing the loan you need at a great rate and on favourable terms.

But a bad credit rating isn’t a financial death sentence, and there are several ways to bounce back and revive your score.

Why do I have a bad credit score to begin with?

  • Lack of financial management – this includes any negative or neglectful financial behaviour, such as:
    • Not paying bills on time or not paying at all
    • Missing on loan repayments
    • Failure to update contact details
    • Making too many applications for credit
    • Defaulting a loan
    • Having your home foreclosed
    • Any court judgment on financial payments

    Your credit score stays with you and there is no reset button so it’s important not to ignore a low credit score.

    • You might not be approved for credit or loans
    • It could be difficult to get approved for a mortgage
    • You may have to pay higher interest rates for loans
    • Loan applications to start a business could be denied
    • It may be hard to finance the purchase of a new car
    • Utility and telco providers may not accept your application to switch to them
    • Your applications to rent property, whether residential or for business, could be denied
    1. Know your score
      This might sound obvious, but you need to know exactly what you’re working with. Order a credit report from more than one credit reporting body (as the score can vary slightly depending on what information they hold).
    2. Check for errors
      It’s a good idea to check all of your personal details are correct including your name and date of birth, to make sure that the credit report is correctly referring to you and your financial history. Also make sure the credit reporting body has all the right information regarding your finances so that no debts are accidentally duplicated, plus double check the amounts for each debt listed.

    How long does it take to fix your credit score?
    It all depends on the reason for the low score. If it’s a reporting error on the part of the credit agency or your credit provider, then you will see a fairly quick improvement. If you need to clean up your finances, then it will take longer.

    If your actions continue to result in the addition of negative information to your report (e.g. by missing credit card or loan repayments) even while making other fixes, then you may not see a positive change in your report.

    To speed things up, try paying off any large credit card debt on or before the due date and correct any errors you spot on your report.

    Check your credit score today with H&R Block MoneyHub

    Don't put off checking your credit score – especially if you think it will be low!

    The sooner you have all the information, the sooner you can start rebuilding your rating.

    The information in this blog post is general in nature and does not constitute personal financial or professional advice. It is not intended to address the circumstances of any particular individual. We do not guarantee the accuracy and completeness of the information and you should not rely on it. Before making any decisions, it is important for you to consider your personal situation, make independent enquiries and seek appropriate tax, legal and other professional advice.

    You can improve your FICO Scores by first fixing errors in your credit history (if errors exist) and then following these guidelines to maintain a consistent and good credit history. Repairing bad credit or building credit for the first time takes patience and discipline. There is no quick way to fix a credit score. In fact, quick-fix efforts are the most likely to backfire, so beware of any advice that claims to improve your credit score fast.

    The best advice for rebuilding credit is to manage it responsibly over time. If you haven’t done that, then you’ll need to repair your credit history before you see your credit score improve. The following steps will help you with that.

    Steps to improve your FICO Score

    Check your credit report for errors

    Carefully review your credit report from all three credit reporting agencies for any incorrect information. Dispute inaccurate or missing information by contacting the credit reporting agency and your lender. Read more about disputing errors on your credit report.

    Remember: checking your own credit report or FICO Score has no impact on your credit score.

    Pay bills on time

    Making payments on time to your lenders and creditors is one of the biggest contributing factors to your credit scores—making up 35% of a FICO Score calculation. Past problems like missed or late payments are not easily fixed.

    Pay your bills on time: delinquent payments, even if only a few days late, and collections can have a significantly negative impact on your FICO Scores. Use payment reminders through your banks’ online portals if they offer the option. Consider enrolling in automatic payments through your credit card and loan providers to have payments automatically debited from your bank account.

    If you have missed payments, get current and stay current: poor credit performance won’t haunt you forever. The longer you pay your bills on time after being late, the more your FICO Scores should increase. The impact of past credit problems on your FICO Scores fades as time passes and as recent good payment patterns show up on your credit report.

    Be aware that paying off a collection account will not remove it from your credit report: it will stay on your report for seven years.

    If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor: this won’t rebuild your credit score immediately, but if you can begin to manage your credit and pay on time, your score should increase over time. Seeking assistance from a credit counseling service will not hurt your FICO Scores.

    Reduce the amount of debt you owe

    Your credit utilization, or the balance of your debt to available credit, contributes 30% to a FICO Score’s calculation. It can be easier to clean up than payment history, but it requires financial discipline and understanding the tips below.

    Keep balances low on credit cards and other revolving credit: high outstanding debt can negatively affect a credit score.

    Pay off debt rather than moving it around: the most effective way to improve your credit scores in this area is by paying down your revolving (credit card) debt. In fact, owing the same amount but having fewer open accounts may lower your scores. Come up with a payment plan that puts most of your payment budget towards the highest interest cards first, while maintaining minimum payments on your other accounts.

    Don’t close unused credit cards as a short-term strategy to raise your scores.

    Don’t open several new credit cards you don’t need to increase your available credit: this approach could backfire and actually lower your credit scores.

    Watch to see how you can manage your FICO Scores:

    How to fix your credit

    Close Close Managing your FICO Scores

    More tips on how to fix your FICO Score & maintain good credit:

    If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly: new accounts will lower your average account age, which will have a larger impact on your scores if you don’t have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.

    Do your rate shopping for a loan within a focused period of time: FICO Scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which you make your inquiries.

    Re-establish your credit history if you have had problems: opening new accounts responsibly and paying them off on time will raise your credit score in the long term.

    Request and check your credit report: this won’t affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.

    Apply for and open new credit accounts only as needed: don’t open accounts just to have a better credit mix—it probably won’t raise your credit score.

    Have credit cards but manage them responsibly: in general, having credit cards and installment loans (and making your payments on time) will rebuild your credit scores. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.

    Note that closing an account doesn’t make it go away: a closed account will still show up on your credit report and may be considered when calculating your credit score.

    Ready to start improving your FICO Scores? Join the myFICO Forums where thousands are on the same journey.

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    FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Scores and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating. FTC’s website on credit.

    How to fix your credit

    Need a mortgage loan? Want to finance a car? Eying a credit card with an amazing rewards program?

    You’ll need a solid three-digit FICO® credit score to qualify for any of those. And if you don’t have one? You’ll need to learn how to fix your credit.

    Most lenders consider a FICO score of 740 or higher to be an especially strong one. But if your score is too low—say, under 640—you may struggle to qualify for loans and the best credit cards.

    The good news: It’s possible to fix bad credit. Credit repair requires patience and a commitment to developing stronger financial habits.

    Here are four ways to help fix an ailing credit score.

    Tip 1: Establish a new history of paying your bills on time

    The problem: late or missed payments – The biggest hurdle to a strong credit score is a history of late or missed payments. Payment history is important because a single late payment can send your score tumbling by 100 points.

    Plus, late or missed payments hang around: They stay on your three credit reports—one each maintained by the national credit bureaus of Experian, Equifax and TransUnion—for seven years.

    The fix: Make sure to pay your credit-card bills and loan payments on time each month. Know that there is a bit of a grace period, too. Your creditors can’t report your payments as late until at least 30 days past due. So if you’re a week late on your credit-card bill, pay it today.

    The more months you pay all your bills on time, the greater the impact this will have on your credit score. But you will have to be patient. Depending on how low your credit score is, it can take several months, maybe even a year or more, of on-time payments to significantly improve your credit score.

    Tip 2: Pay down your credit-card debt

    The problem: too much debt – Do you owe thousands of dollars in credit-card debt? This will hurt your credit score. Paying down this debt, or eliminating it completely, will do the opposite, causing your FICO score to rise.

    There’s some debate about how much credit-card debt you can have and still have a solid credit score. But, in general, if you are using a lower amount of your available credit, your score will be higher.

    Paying down credit-card debt is not an easy task, so it’s smart to have a strategy.

    The fix: You can devote whatever extra money you have each month to reducing your credit-card debt. The more you pay off, the more your credit score will rise over time.

    You can try one of two methods to pay off your cards in a more systematic manner:

    • The debt snowball approach – After making all of your minimum required payments each month, you then devote any extra money to paying down the credit card with the lowest balance first. Once you pay off that low-balance card, move on to the card with the next lowest balance.
    • The debt avalanche approach – You pay off the cards with the highest interest rates first. This method will save you the most money because you’ll eliminate higher-interest-rate debt first. But for some people, paying down a credit card as quickly as possible, with the debt snowball approach, provides an important psychological boost.

    Tip 3: Don’t close those old credit-card accounts

    The problem: pruning plastic – After you pay off a credit card, you might be tempted to close that account. Don’t. This will hurt something called your credit-utilization ratio, something that plays a big role in your credit score.

    This ratio measures how much of your available credit you are using. If you are using a lot of your available credit, your score will fall. If you are using a smaller amount, it will rise.

    Closing a card that you’ve already paid off will automatically cause your credit-utilization ratio to increase, hurting your score.

    Here’s how this works:

    Say you owe $3,000 in credit-card debt spread out over four cards each with a $3,000 credit limit. This means you are using $3,000 of your $12,000 available credit—or 25 percent.

    If one of these cards does not have a balance and you close it, you are now using $3,000 of $10,000 in available credit—or 30 percent. That’s a higher credit-utilization ratio.

    The fix: If you have a credit-card account with no balance, keep it open. Just resist the temptation to run up new debt on it.

    Tip 4: Check your credit reports

    The problem: credit report errors – You may have incorrect information on your credit report—such as a notice that you paid your auto loan late two years ago when you know you’ve always paid this bill on time. If so, the error in your credit history could be dragging down your credit score.

    The fix: You can order one free copy of each your three credit reports each year from the website. Do this. Then review your reports.

    If there is any incorrect information on them, correct the mistake with the reporting credit bureau. Removing an error from your credit reports could provide a quick boost to your score.

    LIFELOCK TIP: If your credit score drops suddenly, you may be a victim of identity theft. Contact one of the three major credit bureaus and place a fraud alert in your credit report.

    Editorial note: Our articles provide educational information for you. NortonLifeLock offerings may not cover or protect against every type of crime, fraud, or threat we write about. Our goal is to increase awareness about cyber safety. Please review complete Terms during enrollment or setup. Remember that no one can prevent all identity theft or cybercrime, and that LifeLock does not monitor all transactions at all businesses.

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    To dispute an error on your credit report, contact both the credit reporting company and the company that provided the information.

    How to dispute an error on your credit report

    Dispute the information with the credit reporting company

    If you identify an error on your credit report, you should start by disputing that information with the credit reporting company (Experian, Equifax, and/or Transunion). You should explain in writing what you think is wrong, why, and include copies of documents that support your dispute. You can also use our instructions

    If you mail a dispute, your dispute letter should include:

    • Contact information for you including complete name, address, and telephone number
    • Report confirmation number, if available
    • Clearly identify each mistake, such as an account number for any account you may be disputing
    • Explain why you are disputing the information
    • Request that the information be removed or corrected
    • Enclose a copy of the portion of your credit report that contains the disputed items and circle or highlight the disputed items. You should include copies (not originals) of documents that support your position.

    You may choose to send your letter of dispute to credit reporting companies by certified mail and ask for a return receipt, so that you will have a record that your letter was received.

    You can contact the nationwide credit reporting companies online, by mail, or by phone:


    Mail the dispute form with your letter to:

    Equifax Information Services LLC
    P.O. Box 740256
    Atlanta, GA 30348

    By phone: Phone number provided on credit report or (866) 349-5191


    By mail: Use the address provided on your credit report or mail your letter to:

    P.O. Box 4500
    Allen, TX 75013

    By phone: Phone number provided on credit report or (888) 397-3742


    Mail the dispute form with your letter to:

    TransUnion LLC
    Consumer Dispute Center
    P.O. Box 2000
    Chester, PA 19016

    By phone: (800) 916-8800

    Keep copies of your dispute letter and enclosures.

    Dispute the information with the company who provided the information (also known as the furnisher)

    If you would like to submit a dispute regarding the information a company provided to the credit reporting company (called a furnisher), use our instructions

    as a guide. Examples of information furnishers are your bank, your apartment landlord, or your credit card company.

    What happens after you dispute information on your credit report?

    If you suspect that the error on your report is a result of identity theft, visit

    , the federal government’s one-stop resource to help you report and recover from identity theft.

    Credit reporting companies must investigate your dispute, forward all documents to the furnisher, and report the results back to you unless they determine your claim is frivolous. If the consumer reporting company or furnisher determines that your dispute is frivolous, it can choose not to investigate the dispute so long as it sends you a notice within five days saying that it has made such a determination.

    If the furnisher corrects your information after your dispute, it must notify all of the credit reporting companies it sent the inaccurate information to, so they can update their reports with the correct information.

    If the furnisher determines that the information is accurate and does not update or remove the information, you can request the credit reporting company to include a statement explaining the dispute in your credit file. This statement will be included in future reports and provided to whoever requests your credit report.

    Don’t see what you’re looking for?

    Browse related questions

    • What if my dispute is ignored or I disagree with the results of a credit report dispute?
    • What are common credit report errors that I should look for on my credit report?
    • What do I do if I think I have been a victim of identity theft?
    • Learn more about credit reports and scores

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    If you are wondering how to fix your credit score in Canada or resolve some bad credit issues on your credit report, we’ll show you how you can fix four common problems. Depending on your situation and how much damage you’ve done to your credit score, the answers vary, but the bottom line here is that we’ll share with you information on what affects credit score in Canada for free (information that some credit repair companies try to charge a lot of money for). We begin with lighter credit problem issues that are very common and move into bigger challenges.

    Jump to a section in this series:

    • How do Missed Credit Card Payments Affect My Credit Score?
    • How Does Credit Card Debt Affect my Credit Score?
    • How do Unpaid Collections Affect my Credit Score?
    • What if I Have a lot of Late Payments on My Credit Report

    How Do Missed Credit Card Payments Affect My Credit Score?

    A lot of people get really concerned because their credit report shows they’ve missed one or two credit card payments. While this may impact your credit score a bit, in the big picture it usually isn’t a big deal. Mistakes happen from time to time, and sometimes things get missed or are even reported incorrectly on credit reports.

    Having a Good Credit History Will Lighten the Impact of Late Payments

    As long as you have a good credit history that spans many years, one or two late payments will be like a small scratch on your car door: it’s unsightly to look at, but in the grand scheme of things, the scratch doesn’t change much.

    But if you drive around with a lot of scratches and dents on your car, people may get the impression that you are careless and may begin to ask questions. The same is true with your credit report. The more late payments that show up, the better the chances are that your lender is going to ask you what happened, and the more likely it is that your credit score will be impacted.

    How to fix your credit

    Request a Free Credit Report Every Year to Keep Your Credit in Check

    If you diligently pay your bills on time, but are wondering if something slipped through the cracks, you can request a free credit report once every year to give your credit a checkup. This is also a good idea anyway to make sure that your credit report is accurate.

    How Does Credit Card Debt Affect My Credit Score?

    If you have had credit cards for a number of years and you always pay your bills on time, yet you have a low credit score, it may be because of the amount of credit card debt you are carrying. If any of your credit card balances are routinely over 75% of your credit limit, this is a red flag to the credit scoring system. Carrying such a high balance on your credit card will significantly lower your credit score because statistically it’s a sign that you may be under increasing financial pressure and you may be quickly running out of financial resources to bail yourself out of a jam. All this means that you’re likely a higher risk, and banks are in the business of managing and reducing their risk, not increasing it.

    Keeping Your Credit Card Balance at 50% or Lower Is Best

    The way to fix this situation is to keep your balances below 75% of your credit card balance. Staying below 50% of your limits will help your score even more, and of course the best thing to work towards is completely paying off all your credit cards every month and trying not to carry a balance at all.

    If you are struggling with your debt and need some expert help, give us a call and make an appointment to speak with one of our Credit and Debt Counsellors. They’re a wealth of knowledge and can provide you with some helpful advice and guidance.

    How Do Unpaid Collections Affect My Credit Score?

    A lot of peoples’ credit scores take a hit for unpaid collections reporting in the public records section of their credit reports. These kinds of collection items include unpaid parking tickets, speeding tickets, traffic fines, cell phone bills, and utility bills. The good news is that as soon as you pay off debts like this, you can ask the creditor to remove their collection notice from your credit report. And, many of them will do just that.

    If one or two collection items were the cause of your low credit score, once these collections are removed it should fix your credit score, which should instantly rebound. When it comes to fixing credit scores, this is actually the only way it can be instantly fixed. Everything else takes time.

    Get a Clean Credit Report by Paying Off Debts, Talking to Creditors and Waiting

    And just so you know, nothing else can be removed from your credit report. Everything else has to fall off over time. So if you have another debt you’d really like to see disappear, you’ll need to pay it off completely, ask the creditor to close it, and then don’t touch it again. After seven years of no activity, the debt or credit facility will fall off your credit report. If it doesn’t, you can contact the credit reporting agency and request that they remove it.

    What If I Have a Lot of Late Payments on My Credit Report

    Why Did My Credit Score Drop?

    • Applying for credit too often in a 12 month period
    • Using over 75% of your credit limits
    • Missing payments on debts that report to the credit bureaus
    • Filing for bankruptcy or a consumer proposal

    How Can I Fix My Credit Score Faster?

    The short answer on how to increase your credit score in Canada? Use credit wisely and pay off debts. While you’re working at paying off your debts and improving your credit payment history, there are a couple of things you can do to fix your credit score faster:

    1. Have at least one credit product available to you and use it responsibly.
    2. See if a Debt Management Program is a good option for your situation.

    Pay Off Debts Through a Debt Management Program (DMP)

    You can also fix your credit through a Debt Management Program (DMP). We don’t recommend using a DMP for this purpose, but if you can no longer afford to pay your credit card debts, then going on a program with one monthly payment and little or no interest could make sense.

    If you work hard at paying off your debt aggressively while on a debt management program, you can be debt free within two or three years. The record of all debts put on the program will then be erased from your credit report 2 years after you finish the program. This is much faster than waiting the normal seven years to get a clean slate. It’s also much faster, more satisfying, and results in higher average credit scores for consumers than filing a consumer proposal or declaring bankruptcy.

    Learn more about Debt Management Programs or explore other debt relief options that can help you achieve your financial goals sooner.

    Checking your credit score regularly and reviewing your credit report annually are two key things that can help you maintain a strong score or make improvements. If you find that your credit score plunged, it’s important to take a close look at your credit report and determine what caused it. You may find that a delinquent account is dragging you down, you might find an error on your report, or you might discover some fraudulent activity. Even if your score remains steady, it’s a good idea to review your full credit report once a year and make sure everything looks accurate.

    How to fix your credit

    If you find a mistake or an error on your credit report you should take action to fix it quickly before anyone uses your flawed report and score to make a decision about you.

    3 Steps to Correct an Error on Your Credit Report

    Step 1: Get a copy of your credit report

    First, get a copy of your credit report. Based on the Fair Credit Reporting Act (FCRA), you are entitled to request a free copy of your credit report once every 12 months from any of the nationwide credit reporting companies — Equifax, Experian, and TransUnion. To get your annual free credit report, visit, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Do not contact the three nationwide credit reporting companies individually.

    Step 2: Review your credit report and identify errors

    Get familiar with your credit report. You can think of your credit report in four categories:

    • Personal information: your name, current and previous addresses, your employer, etc.
    • Public records: bankruptcies, repossessions and foreclosures
    • Credit accounts: open and closed accounts and payment history
    • Inquiries: recent applications for credit will appear on your report and remain on it for 24 months

    Is there something reported that shouldn’t be on there? Delinquencies and derogatory marks have a huge impact – making up 35% of your FICO score! Personal information errors typically don’t affect your credit score, but they could alert you to a reporting issue or possibly identity theft.

    Step 3: Take Action – File a Dispute

    If you find an error in your credit report you should contact the credit bureau that you got your report from and request a correction. Visit Transunion, Equifax and Experian’s websites to get specific directions and details on how to file disputes with each bureau online, by phone or by mail.

    • Step 1: Tell the credit reporting company what information you think is inaccurate. Have the proper documents that support your position handy.
    • Step 2: Tell the person, company, or organization that provided the incorrect information about you to a credit reporting company that you dispute an item in your credit report.
    • Step 3: Check your credit report from the other bureaus to see if they also had the same error so you can file a dispute with them too.

    Stay vigilant

    Keep a pulse on your credit score so you can take quick action if you notice there is a surprising change. Your credit report includes all of your credit history and sifting through it annually will help you catch any discrepancies that may be dragging your score down. You can also sign up for credit monitoring tools to continually watch your credit profile and get access to your credit score.