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Credit score increasing with good habits

Tips For Rebuilding Credit

Brink's Money

01 Mar 2021

Poor credit scores may be intimidating. A poor score can affect you qualifying for a lease or mortgage or a new credit card. But the reality is that poor scores don’t have to stay that way. The truth is that there are initiatives you can take to start rebuilding your credit.


Brink’s Money is here to give you a guide as to the best tips to start rebuilding your credit score. Improvements won’t happen overnight, but by following our guide you can expect to see an improved credit score over time.

Pay Your Bills On Time

Paying your bills on time is one of the most crucial financial habits to have when you want to rebuild your credit. Timely payments are critical, even if you are only paying the minimum amount due. When credit bureaus look at your credit score, payment history is the factor they pay the most attention to and that’s why you should avoid a late payment at all costs. A late payment can stay on your report for several years, making it difficult to recover from.


An easy online tool that you can use to help make on-time payments is setting up automatic payments or reminders. With automatic payments, you can set the time of the month when your account will be billed so you won’t have to worry about manually making payments or remembering when a bill is due.

Additionally, if you have any late payments, it’s important that you make them current and try your best to repay at least the minimum amount. Although the payment is marked as late, by paying it you will be able to change the status of it to say that you no longer owe money to it which can prevent your score from dropping even lower.

Consider Your Credit Utilization

Before trying to rebuild your credit, it’s valuable to take note of your credit utilization rate. Your credit utilization rate examines the amount of credit you have available on your credit card compared to the amount of money you are spending with it or your current balance. The lower your credit utilization rate is, the better it is for your credit score. Most financial experts recommend that you keep this percentage lower than 30%.



Here are a few ways you can help keep your utilization rate low:

  • Keep your monthly credit card balance low or ideally at zero

  • Make sure you pay down your credit card debt

  • Leave cards open after paying them off

  • Ask to increase credit limit

  • Pay off your balance weekly rather than monthly


Your credit utilization rate is just one of the many factors taken into account when determining your credit score but nonetheless it’s something you should consider.

Use a Secured Credit Card to Help Improve Your Score


Have you considered opening a secured credit card? Getting one might be your credit score’s best chance at recovering. A secured credit card is usually for people who are hoping to rebuild their credit. To open a secured credit card, you are required to set a refundable deposit which serves as your limit. This type of card is used like any other credit card until you choose to close the account. If you decide to invest in a secured credit card, be sure to choose one from a financial institution that reports your payments to the three credit bureaus.


A secured credit card is a great tool to start rebuilding your credit score. It’s a guaranteed approval so you won’t have to worry about qualifying. Additionally, since the credit limit comes directly from your security deposit, there is little to no risk for the company issuing you the card. Just like a regular credit card, if you manage to make timely monthly payments and do not exceed your spending limit, a secured credit card will help you improve your credit.

Review Your Credit Report for Any Errors


As you decide to rebuild your credit and start working towards it, an essential part of the process is to use data to track your progress which means regularly reviewing your credit report. One way to keep an eye on your credit is to sign up for credit monitoring. It can save you the time of reviewing your report and it is also a free service so you won’t need to take on an added expense. A service such as credit monitoring will notify you if there is any change to your credit so you are overall more informed about your rebuilding process.


If you do wish to review your credit report on your own, you can order a copy from each of the three major credit bureaus and look for any noticeable errors in the document. By examining your report, you can determine common trends or habits that may be the source of your falling credit score.



Here are a few credit report errors to look out for:

  • Incorrect payment statuses

  • Incorrect accounts

  • Outdated information

  • Identity errors such as wrong name, address, or phone number

  • Closed accounts reported as open

Keep Old Accounts Open

If you have paid off a credit card, your first instinct might be to close the account perhaps because you don’t want the temptation to spend more money. In reality, it’s in your best interest to keep the accounts open. In the long run, an old credit account can continue to improve your credit history rating.


Take a look at a few benefits to keeping your accounts open:


  1. Lower Utilization Rate. Having a card you don’t use can help lower your utilization rate while you are using other cards and can even increase your overall credit limit.

  2. Extra Benefits. You might already have access to points or cash back, but with loyalty to an old card you could enjoy extra benefits and features.

  3. Account Mix. Having a diverse set of accounts that you have managed responsibly will show companies that you’re responsible.

We hope these tips will help you in your process to rebuild your credit. Although having a good credit score is a great asset, it’s important to remember that it doesn’t happen in the blink of an eye but rather takes time and dedication. By following these steps, you’ll be on the path towards a better score and working towards your financial goals and dreams.

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