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If you have fallen on hard times, you can still repair your credit. You can start by not carrying a high credit card balance. Seek credit counseling to help you prepare budgets and pay within your means. Reign in your credit card balances and get rid of useless credit cards. You only need two of them. Leave your account open even if you have paid off the debt. Pay your bills on time to get a favorable rating.

Track credit card balances

Maxing out your credit cards sends the wrong message to the credit bureaus and creditors. Each time you apply for credit, the organization looks at your debt to credit ratio. Businesses will look at your credit score and rate you based on a simple calculation. If your debt is below 30 percent of the math, it is time to reduce the debt and repair your credit.

Your debt-to-income ratio is another tool lenders use to issue you credit. They need to know you can keep up with your monthly payments. If you do not keep your credit card balance below the limit, creditors will wonder if you are a real risk. Make sure your credit card balances are less than half of the credit limit if you want to repair your credit. It will increase your credit score.

Credit Counseling Organization

It is workable to repair your credit according to the Federal Trade Commission (FTC). You can be successful even if you have had an adverse financial history. All creditors do not have the same rules. They set standards based on the service they offer. You can get in touch with each of them and ask to see their procedures.

If you feel you cannot keep up with a creditor’s payment plan, contact a debt relief program or credit counseling agency. Several of them are non-profit organizations. Even though the company says, “non-profit,” it may still charge a fee for its services. A few credit counseling agencies work through local offices. They work at universities, credit unions, and housing authorities. You can also get help through branches of the U.S. Cooperative Extension Service.

The counselors will coach you on managing your debt and how to prepare a budget. Certified counselors work with the credit counseling agencies. Their certification includes consumer credit, money, and debt management. They will help you to repair your credit.

Part of the discussion includes reviewing your financial history. They will also consider your current financial position. Based on the results, they will offer you a personalized plan to fit your budget. The first session will take about an hour. Take advantage of their free educational materials and workshops. They will help you to repair your credit.

Get rid of credit card balances

If you have several credit cards with small balances, pay them off as soon as possible. Part of the FICO Score calculations looks at the balances on each credit card. Instead of charging up several credit cards, try to use one or two cards to build a solid history. Two cards are all you need to help repair your credit in the long-run.

Do not close your accounts

If you have finished paying off your debt on a few credit cards you own, leave the accounts open. Lenders will think you are a good risk when they see a report with zero balance on open lines of credit. Part of your FICO Score takes into account the length of your credit history.

The longer you have an open account with a zero balance, the higher your score will be. Leave the accounts open as long as possible. If you remove them, it will lower your credit score and will not help you to repair your credit.

Pay bills on time

When you pay your bills on time, it looks favorable on your credit report. If you are late with paying any of your bills, it will show up on your credit report and lowers your credit score. If a collections agency gets involved because of a past due amount, your FICO Score could be at risk.


Repairing your credit includes following a few steps: The first phase involves monitoring your account balances. Make sure you are not nearing the credit limit or going over it. Stay below half of the credit limit. Contact credit counseling organizations. They will help you to plan budgets and pay within your means. If you have several credit cards with small balances, pay them off and use only two of them. Do not close the accounts you have finished paying. Leave them open and please pay your bills on time.