15 years ago, my credit score was low – in the 600’s. My husband’s score was similar. We wanted to buy a house.

Unfortunately, sub-prime mortgages were still a thing, and we qualified for one.  With two mortgages in place, one “normal” loan for 80% and one 12% INTEREST loan for the other 20% (100% financing is no longer allowed after the subprime mortgage crisis of 2008.)  We were all set to move into a house we couldn’t actually afford.

We were the anomaly in that our careers were on the rise and we ended up being able to more easily afford the house after a few years, and refinance to a traditional type of loan with a low interest rate.

Great story, huh? Haha!! All it took was hard work, lack of curtains in the living room for the first year and a slow but steady repair of both of our credit scores.  I’ll tell you exactly how I did it.

  1. Get a copy of your credit report and check information for accuracy.  You can get a free copy from all three major credit bureaus here: https://www.annualcreditreport.com/index.action.
  2. Contest any debt that is not yours or not legitimate.
    1. Ask the creditor to remove any fraudulent or incorrect debt from your credit report, and follow up to make sure it is done.
  3. Notify the bureaus of any other inaccurate information on the report (Addresses, name spelling, name variations, etc.)
  4. Make a plan to tackle debt on the report.
    1. Follow the first two steps of Dave Ramsey’s baby step program – save $1,000 for a starter emergency fund and pay off all debt except for your mortgage by following the debt snowball plan.
  5. Make your debt to credit ratio as high as possible.  If you have $50,000 of available credit with $3,000 used, you’re going to look like a great credit risk – therefore a higher score.   On the flip-side, if you have $5,000 of credit with $3,000 used, you’re going to look risky – and have a lower score.
  6. Move old credit card debt to a new card – this is not a strategy to move things around to avoid paying.  It is a calculated move to reduce interest and make it appear that you have not been sitting on the same credit card debt for years.
  7. Do not incur new debt while you are in this process.  The starter emergency fund is in place to help avoid this.  If you have to use the emergency fund, halt the debt snowball until the fund is replaced.

Completing these steps will give you a great credit score.  I took ours from 600 to 850 using these steps. It’s not complicated, but it will take some time and persistence.  Any service that says they can fix your credit score quickly is likely full of baloney.