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How to rebuild your credit 

When you experience a financial 

challenge, your credit record could 

suffer. Rebuilding it takes time. 

There are no shortcuts or secrets. 

The steps below can help

1. Pay your bills on time, every time 

“On time” means the payment got to the company 

by the day the bill is due. Mail your bills a few days 

before they’re due.

Automatic payments from your bank can be a good 

way to make sure your bills get paid on time. Keep 

track of automatic payments so you know you have 

enough money in your account to cover them.

2. Don’t get too close to your 

credit limit 

Credit scores consider how close you are to being 

“maxed out” on credit cards. If you use too much 

of your total credit lines, you can hurt your credit 

score. Experts advise using no more than 30 

percent of your total credit limit – some even say 

you should use less than 10 percent.

3. Don’t apply for too much credit 

in a short time 

Your credit score may go down if you apply for or 

open a lot of new accounts in a short time. This 

includes getting a new card so you can transfer 

balances, or opening a new store card account so 

you can get a discount. 

4. If you can’t qualify for a regular 

credit card, try a secured card 

Many banks and credit unions offer secured credit 

cards. With most of these cards, your credit line 

starts out small. You put an amount equal to your 

credit limit in an account as a deposit.

As you show you can pay on time, your credit limit 

may grow and you may have your deposit refunded. 

Fees and interest rates can be high for secured 

cards, but using one can help you to establish a 

credit record.

5. If you pay with a credit card, pay your 

balance off every month

You’ll build credit by using your credit card and 

paying on time, every time. Pay off your balances 

in full each month to avoid paying finance charges. 

Paying off your balance each month can also build 

better credit than carrying a balance. Think about 

signing up for text alerts and automatic payments 

to make sure you don’t pay late or miss a payment.
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6. Keep it up 

Credit scores are partly based on experience over 

time. The longer you have credit and pay on time, 

the more information there is to show you’re a good 

credit risk.

7. Check your credit reports and fix 

errors right away

Credit scores are partly based on experience over 

time. The longer you have credit and pay on time, 

the more information there is to show you’re a good 

credit risk.

You can get a free copy of each of your credit 

reports from the three nationwide credit reporting 

companies every year at annualcreditreport.com.

You may find incorrect information that is bringing 

your score down. If you do, file a dispute with the 

credit reporting company.

How long does negative information stay 

on my credit report?

Bankruptcy 10 years

Foreclosure 7 years

Lawsuits and judgments 7 years or longer

These four things don’t help 

rebuild your credit

1. Using a debit card or paying cash. These 

transactions don’t help you prove you can 

repay debts.

2. Using a prepaid card. A prepaid card is 

your own money, loaded on tothe card

in advance.

3. Taking out a payday loan. Even making 

on-time repayments might not help

your credit.

4. Taking an auto loan from a “buy here, 

pay here” car lot, unless they promise in 

writing to report your on-time payments.

Contact us

 Online

 consumerfinance.gov/askcfpb

 By phone

 (855) 411-CFPB (2372)

 (855) 729-CFPB (2372) TTY/TDD

 By mail

 Consumer Financial Protection Bureau

 P.O. Box 4503

 Iowa City, Iowa 52244

 Submit a complaint

 consumerfinance.gov/complaint