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Improve or Rebuild Your Credit

Take steps today to better your credit

Whether you’d like to improve your credit score,  or you need to recover and rebuild from an event that damaged your credit, there are some key steps you can take to improve or rebuild your credit:

  • If you have fair or good credit, but want to improve it to help qualify for better rates or more borrowing options, consider the strategies for improving your credit.
  • However, if you had any accounts that were delinquent or in collections, or had declared bankruptcy, you can still repair your credit. Consider these strategies for rebuilding your credit.

Improve your credit

Good credit affords you numerous opportunities. With good credit, you may be able to access better borrowing options, qualify for lower interest rates, and receive better terms.

Whether you’re hoping to qualify for the best rates or need to make up for a couple of missed payments, you can improve your credit with a few simple steps and get closer to achieving your financial goals.

  1. Check your credit report. Obtain your free annual credit report, review it to identify what’s most affecting your credit score and understand what you can do to improve your credit history. Here are a couple of things to evaluate: "Do you have any late payments?” “Are you maxing out on your credit cards?” Next, make sure there are no errors — if there are, contact the bureaus showing the incorrect information.  There are three national credit bureaus: Experian, TransUnion, and Equifax.
    Get your free annual credit report
  2. Keep payments current. Continue to make timely payments on all your accounts. Since credit reports capture whether you are 30, 60, or 90 days late, catch up on any late payments as soon as you can. The later your payment, the more it will impact your credit score.
    Wells Fargo Online® — Bill Pay
  3. Keep balances low. Regardless of your credit limits, charge only what you can afford and pay it off quickly. Keep in mind that a good target goal is to keep spending below 30% of your credit limit across all accounts.
  4. Remain consistent. Good credit takes time to establish. Manage your accounts responsibly and consistently to demonstrate good credit habits. Remember, improving your credit score won’t happen overnight, so focus on implementing positive credit practices.
    Good Credit Habits
  5. Review what lenders look for. When you’re ready to apply, take another look at what lenders may consider, and make sure to stay on top of your debt-to-income ratio. This is an important factor that Wells Fargo and other lenders consider when extending new credit.
    1. Know what lenders look for
    2. What is my debt-to-income ratio?

Rebuild your credit

We recognize that regaining control of your debt can feel challenging, but with time, you can achieve it. Rebuilding credit takes patience, so make decisions based on your overall financial situation, not just your credit score.

First, if you’re having difficulty making payments, call your lender today for help.

Once you’re ready, take a look at the following ways you can help rebuild your credit:

  1. Know where you stand. Take a step back. Use your credit report as you consider your situation. Do you know where you stand with your payments? Are any of your accounts delinquent or in collections? What other financial obligations do you need to consider, such as rent, gas, and other necessities that don’t show up on credit reports? Assess your credit and financial status before moving forward.
    1. Get your free annual credit report
    2. Calculate your expenses
  2. Stay current. Stay on top of current accounts by making at least the minimum payment on time every month. Then, when you’re able, take action on any delinquent accounts. If you have any accounts in collections, check your credit reports to find out who you can call to address these past-due payments. Remember, payment history accounts for 35% of your credit score.
  3. Lower your account balances. It may take time, but one of the best ways to rebuild credit is to lower your balances, the amount owed or used on your credit cards. Be mindful of your credit limits and, as soon as it’s realistic, try to keep your usage under 30% of the limit on all credit cards and credit lines. 
  4. Keep accounts active. Don’t suddenly close all of your accounts, as this can actually work against you. Instead, keep at least one account active by making small purchases (such as $25) and paying it off in full every month. Your credit report will capture this behavior and may help you rebuild a solid credit history.
  5. When you’re ready, take on new credit. With careful management, you may be ready for new credit. But make sure to set manageable goals:
    1. Apply for a secured loan or line of credit
    2. Use a secured credit card
    3. Consider becoming an authorized user on an account of someone you know and trust
    4. Find a cosigner or co-applicant who can apply with you

If you’re facing challenges and need personalized assistance, don’t wait: lenders want to work with you. Visit Wells Fargo Assist for help with Wells Fargo payments, or the National Foundation for Credit Counseling.

Having difficulty making payments?

Learn how to contact your lenders and find a repayment plan that works for you. Or, look into debt consolidation to lower your monthly payments.

Products to consider

Fair or good credit

Wells Fargo standards for credit scores:

Debt-to-income (DTI) ratio

Your debt-to-income ratio is the percentage of your monthly income that goes toward paying down debts and other monthly expenses like rent.

Cosigner or co-applicant

A cosigner is someone who lends their credit to help the primary borrower qualify for a loan and is responsible for repayment if the primary borrower fails to make payments.  A co-applicant applies jointly with the primary borrower and shares responsibility for the repayment of the loan.  Any new debt taken will appear on both the primary borrower and the cosigner or co-applicant’s credit report and may impact their credit score.