How to Repair Your Credit Score

Your credit score affects many parts of your financial life. It can determine whether you qualify for a mortgage, get approved for a credit card, or even land a job.

If your score needs improvement, you can take steps to fix it. While it won’t change overnight, steady progress can help you reach your financial goals.

Sprint Funding helps you take control of your credit and secure better financial opportunities. Contact us today to explore your options and start improving your financial future.

Understanding Credit Scores

A credit score is a numerical summary of how you manage money. Lenders, landlords, and sometimes even employers use it to assess your financial responsibility, making a good credit score essential for securing loans and favorable terms. The score is based on several factors, each carrying a certain weight.

What Makes a Good or Bad Credit Score?

Your credit score is calculated using these five factors:

1. Payment History (35%) – Late or missed payments can lower your score. The longer a bill remains unpaid, the bigger the impact.
2. Credit Utilization (30%) – This is the percentage of available credit you’re using. Keeping it below 30 percent helps maintain a strong score.
3. Credit History Length (15%) – The longer you’ve had credit accounts open, the better it is for your score.
4. New Credit Inquiries (10%) – Applying for multiple new accounts within a short time can lower your score.
5. Credit Mix (10%) – Having different types of credit, such as loans and credit cards, can improve your score.

What Happens When Your Credit Score is Low?

A low credit score can lead to:

1. Higher interest rates on loans and credit cards.
2. Difficulty getting approved for loans, credit cards, or rental applications.
3. Limited job opportunities, since some employers check credit reports.
4. Higher insurance premiums, as some insurers use credit scores to determine rates.

High levels of credit card debt can also contribute to a low credit score.

Improving your score can save you money and open new financial opportunities.

How Negative Information Affects Credit

Late payments, high credit utilization, and collections can stay on your credit report for years. Failing to pay your credit card bill on time can lead to high credit utilization and late payment marks. Lenders view these as warning signs, making them hesitant to approve new credit.

Since credit card companies report balances at the end of billing cycles, carrying debt from month to month keeps your utilization high. Reviewing your credit reports regularly from Experian, TransUnion, and Equifax can help you catch errors or outdated information that may be affecting your score, as accurate credit reporting is crucial for maintaining a healthy credit profile.

How to Review Your Credit Report for Free

Before improving your credit, you need to know where you stand by reviewing reports from all three credit reporting agencies. You can access a free credit report once a week at AnnualCreditReport.com. Reviewing reports from all three credit bureaus allows you to:

1. Identify incorrect information – Look for wrong balances, duplicate accounts, or late payments.
2. Detect possible fraud – Unfamiliar accounts may indicate identity theft.
3. Track progress over time – Regular reviews help you see how your financial actions are affecting your score.

If you find errors, you can dispute them with the credit bureau. Fixing mistakes can improve your score if they were unfairly lowering it, so always check with the major credit bureaus.

Dealing with Negative Marks on Your Credit Report

Negative marks do not last forever. Most fall off your report after seven years, but you can take steps to reduce their impact:

1. Pay down outstanding debt to lower your credit utilization.
2. Make all payments on time to rebuild a strong payment history. Making all payments on time helps rebuild a positive payment history, which is important for improving your credit score.
3. Limit new credit applications to avoid unnecessary hard inquiries.

Steps to Improve Your Credit Score

1. Pay Your Bills on Time

Your payment history has the biggest impact on your credit score. Even one late payment can cause a drop. Setting up automatic payments or reminders can help you stay on track with your credit card bill and other financial obligations.

If you cannot pay the full amount, at least pay the minimum due to keep your account in good standing.

2. Reduce Credit Utilization Below 30 Percent

Credit utilization refers to the amount of credit you are using compared to your total available limit. Reducing credit card debt is a key strategy for lowering your credit utilization ratio. A high balance can lower your score.

Ways to lower credit utilization:

1. Pay bills before your statement closing date.
2. Make multiple smaller payments throughout the month.
3. Request a credit limit increase on existing accounts instead of opening new ones.

3. Use a Secured Credit Card to Build Credit

If you have limited or poor credit, secured credit cards can help you build a positive credit history. These cards require a deposit as collateral, and your spending limit is based on that deposit.

Using a secured card for small, regular purchases and paying the balance in full each month helps rebuild your score over time.

4. Consider a Credit-Builder Loan

A credit-builder loan works differently from regular loans. Instead of receiving funds upfront, you make fixed payments into a savings account. Once you’ve completed the loan, the money is released to you.

This helps establish a history of on-time payments while allowing you to save money.

5. Keep Older Credit Accounts Open

The length of your credit history plays a role in your score. Closing old accounts shortens your credit age, which can lower your score.

If an old credit card has no annual fee, keep it open to maintain a longer credit history.

6. Avoid Too Many Credit Applications

Every time you apply for credit, a hard inquiry is added to your report. Too many inquiries in a short time can make lenders think you are having financial trouble.

Instead of opening new accounts frequently, ask for a credit limit increase on an existing card. This helps lower utilization without adding new inquiries.

7. Set Up Automatic Payments

Setting up automatic payments prevents missed deadlines, which protects your score. Even if you only set up payments for the minimum due, it helps keep your accounts in good standing.

Take Control of Your Credit

Improving your credit takes time, but every step helps.

1. Check your credit report regularly for errors by contacting each credit reporting agency.
2. Pay bills on time to build a strong history.
3. Lower your credit utilization to improve your score.
4. Use secured cards or credit-builder loans if you are starting over.

A better credit score opens financial opportunities, from lower interest rates to better loan approvals. If you are unsure where to start, professional guidance can help.

Need Help? Contact Sprint Funding Today!

Your credit score is one of the most powerful tools for financial success. Start improving it today, and if you need guidance, Sprint Funding is here to help.

Our team can walk you through your options and help you get back on track. Reach out today and take control of your financial future!