How to Repair Credit Score in 9 Steps

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Here at Granite Hyundai, we want all our drivers to be in the best possible position when buying or leasing a car, truck, or SUV. Whether you understand the ins and outs of credit scores and how to build credit or need some help, we are here to spell things out in this post. Wondering how to repair a credit score is something all of us go through, so please stay tuned as we help with some credit-saving tips below!

1. Seek Financial Guidance

If you want to know how to repair your credit score before buying a new car, the best advice one can give is to seek financial guidance. You might be unaware of how debt works, impacts credit, and can stop you from getting the vehicle of your dreams, which is why we want you to step back and speak to a professional before making any decisions.

A financial advisor can help with debt consolidation, loan offers, savings accounts, reporting inaccuracies to credit bureaus, tax filing, and much more. You may want to consider this as a first step in your credit repair journey.

2. Review Your Credit History

Every person over 18 years old and with a financial history in the United States will have a credit report and score. You can review your credit history through the three major credit bureaus: Equifax, Experian, and TransUnion, all of which have websites and free score checks. Your bank might also include perks like free credit score reports each month, so we recommend checking with them. The more you know, the better you can plan ahead.

3. Dispute Credit Inaccuracies

Credit history inaccuracies are more common than you would think. That is why we recommend checking your score for things like hard inquiries, debt, open and closed accounts, and any outstanding or "late" payments you might be responsible for. If there are problems with your account and report, you can simply dispute with the relevant credit reporting agency by phone, email, or mail.

Pro tip: The best way to keep a paper trail/proof of reporting credit inaccuracies is to contact the responsible creditor via certified mail.

4. Bring Past-Due Accounts Current

One of the heaviest hitters on a credit report is past-due payments and outstanding bills from credit cards, loans, and other agreements. If you miss even one payment to someone you owe money to, they will report this to the credit agency you depend on to score you. This can trigger a huge drop in score, even potentially by 100 points or more. You want to try to work out a payment schedule and amount that works for your budget to avoid this. Always try to pay something, even the minimum.

5. Settle Outstanding Debts

If you have money owed, whatever amount, it is a good idea to try and settle it. This might mean consolidating debt into one lump sum that you pay monthly, or it could mean writing a check and not using that account at all. You can maintain a small balance with creditors as long as your minimum is met, so this is not to say you have to be at a $0 balance every month's end. Try to find a healthy mix.

6. Enable Automatic Payments

Enabling automatic payments is one of the easiest ways to help repair your credit score as you won't be late on your accounts. When you create an account for a credit card, personal loan, mortgage, car, or beyond, you will have the choice to enroll in automatic monthly payments. You can choose to meet the minimum or custom amount every 30 days, which will keep your credit score from plummeting due to missed or delinquent payments.

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7. Keep Your Credit Utilization Low

Using less than 30% of your available credit is a good way to improve your score over time. We call this credit utilization, which is the amount of credit you use versus what you have available to use at the end of each billing cycle. Stay under 30% for the best result, or simply try and get a higher credit limit (without using it).

Pro tip: Keep your credit utilization under 30% for the best long-term score. If you can get under 10%, this will look even better to current and potential creditors and loan providers in the future.

8. Keep Unused Credit Lines Open

Even if you do not want or need a credit card/line of credit after paying it, we do NOT recommend closing it. When you close an account, this can hurt your credit score. That is because it removes that line of credit from your available balance, which can push you over the <30% utilization threshold. Keep the card for as long as possible, and try to use it for small purchases every so often to avoid account closure.

9. Explore a Secured Credit Card Option

Another way you can raise your credit score, especially if it is low, is to consider a secured credit card. These credit cards require a refundable security deposit to establish a line of credit, often seen as collateral for the credit card issuer. Of course, low-score or no-score credit card options might issue you a small line of credit to start, so you can explore a few different avenues when applying.

Use Granite Hyundai's Credit Repair Program

If you are wondering how to repair your credit score fast and need guidance, your local team at Granite Hyundai of Somersworth, NH, is always here to lend support. Our dealership offers a Credit Repair Program, which can help with things like cleaning up credit reports, establishing a payment history for an auto loan, and getting you a fair APR on the Hyundai you end up selecting.
We are open daily and would love to speak with you about your credit options and solutions, so please swing by. We want to help you out and find a path forward.