diy credit repair

The Only DIY Credit Repair Guide You’ll Ever Need

It’s no secret, credit makes the world go around. It’s needed to do a number of important things like renting an apartment, borrowing money, purchasing a home and much much more.

That’s why, if you’re like the 1 out of every 3 American adults that have what is considered bad credit, you may be asking yourself if there is anything you can do to change your situation.

Fortunately, the answer to that question is a resounding yes.

While it takes work, it is possible to repair credit. And many of the methods you can utilize are things you can do on your own via DIY credit repair!

Below, our team has compiled a list of the basics you need to know about credit and proven methods you can start pursuing to take your score from sub 600 to 700 and beyond!

What is Credit and How Does it Go Bad?

Credit is essentially a score tracked by major bureaus like Experian and Equifax. This score tells providers of goods and services what your trustworthiness is in regard to finances.

For example, if you’re looking to borrow money from a lending institution, your credit score will allow your lender to assess the risk involved in lending to you. Armed with that information, they can choose whether or not to work with you and if yes, how much to charge you in interest in fees.

The categories that can make your credit go south are as follows – Payment History, Credit Usage, Length of Credit History, Credit Types and Recently Awarded Credit.

If you have favorable marks in those categories, your credit will flourish. If you don’t, your credit will flounder.

How Can I Start With Self Credit Repair?

Now that you know about what credit is and how it is affected, let’s talk DIY credit repair. We will look at each of the aforementioned factors that affect credit in-depth and talk about how you can leverage them to your DIY credit repair advantage!

Payment History

Payment history is the most important factor that affects your credit.

This factor is pretty straightforward. Make payments on time and your credit score will go up. Miss payments and your score will plummet.

A poor payment history is the number one reason why people suffer from bad credit. The best way to spin this credit factor in your favor is to get organized and spend responsibly.

For that reason, you should never charge money to your credit cards you can’t afford to pay back. You should also set up “auto-pay” with your credit provider so you never accidentally miss a due date.

If you’re falling short on your credit card balance at the end of the month, at least pay the “minimum payment due” to ensure you don’t get dinged!

Credit Usage

Credit usage looks at how much credit you have available to you across all of your credit lines and how much of that money you’ve spent.

This credit factor is one of the easier DIY credit repair fixes you can work towards because getting favorable marks in this category is as easy as keeping the amount of credit you use on each of your lines below 30% of your limit.

To get started, work to pay down your existing credit lines to below 30% utilization. Once you have that done, only exceed that percentage in the future in emergency situations.

Length of Credit History

Length of credit history doesn’t require as much in the way of DIY credit repair as it requires in patience. All this factor looks at is how long you’ve had lines of credit open. The longer you’ve had credit, the more favorable you will be viewed.

The good news is that you’re improving your credit score on this front with every passing second!

Credit Types

Credit tracking bureaus like to see that you have a mix of credit types from cards, to student loans and beyond. This credit factor doesn’t have much of an impact on your overall score. Therefore, it’s not worth taking out an additional line of credit to diversify your portfolio.

Instead, focus your efforts on creating budgets for yourself and paying down your existing credit lines to get them below 30% utilization.

Recent Credit

Whenever you apply for a new line of credit, your lender will perform an inquiry which either creates a soft or hard pull on your credit history.

Soft pulls will not hurt your credit score. Hard pulls, however, can even if you don’t get approved.

Credit dings via pulls are typically non-serious, especially if you apply for lines of credit infrequently. Furthermore, these pulls fall off of your credit report over time so the only DIY credit repair tip we can give you here is to limit the number of times you apply for credit lines, particularly before doing something like submitting an apartment application.

Wrapping Up DIY Credit Repair Tips

DIY credit repair is the act of taking it upon yourself to make adjustments to your lifestyle that can have a substantial positive impact on your credit. To make sure that you’re investing your time in actions that will make a difference, make sure that everything you do works to improve your standing in the categories we’ve discussed above.

Doing that rather than wasting your time with credit repair schemes will help you maximize your time and get you on your way to the credit score you’ve always dreamed of!

Building good credit always has responsible saving and spending at its foundation. To that end, we’ve got you covered!

For more of the best financial advice available to you on the web, dig deeper into our content today!