Fixing Your Credit

You've run your credit report and the results are, well, less than inspiring. Here's how to improve the situation.

Money Sense
Learn how to fix your credit with Ryan Homes

We know the story. You want to apply for a mortgage, but you ran your credit report and your score was low (ugh!). Since getting a mortgage is dependent on a solid financial history, you'll want to clean up your credit at least six to 12 months before you apply for a mortgage.

Yes, You Can Fix Your Credit Report

Discover Real Value

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As we described in another post, “Understanding Credit Scoring,” your credit score or “FICO” score is a snapshot of your financial history at a moment in time (FICO stands for Fair Isaac and Company; it's is the brand of software the credit bureaus use). Here's the deal: If the way you handle credit changes, your FICO score will gradually change.

Make positive adjustments and stick with ‘em, and things will improve for sure.

OK, So Here's What to Do

  • Pay all your bills on time from now on. The longer you pay your bills on time, the higher your credit score should increase.
  • Pay off your highest-interest debt first.
  • Pay off any revolving (credit card) debt and don't move it around or close accounts. Owing the same amount with fewer accounts can hurt your credit score.
  • Don't close unused credit cards as a short-term strategy to raise your score—they still stay on your credit report. In fact, do some light charging on them to keep them active.
  • Contact creditors and ask them to remove the late payments reported on your account. Since most of these calls are fielded by a call center, if a rep doesn't give you the answer you want, call back and be persistent (and polite) with the next agent.

Get Smart

  • If you're feeling overwhelmed by expenses and you can't seem to figure out where your hard-earned dough is going, set up a household budget. You can find free Excel budget worksheets on
  • Don't believe the messages you hear on television to quickly repair credit. According to the Federal Trade Commission, many of these companies operate scams.

Still Need Help?

If you're still feeling out of control, contact a legitimate credit counselor who can help you consolidate your debts. They can contact debtors on your behalf to reduce or eliminate finance charges. Free counseling is available at the trusted National Foundation for Credit Counseling, the country's largest national, nonprofit counseling network. Find out more information at or call 800-388-2227 for an office in your area.