September 13, 2023

6 Simple Ways to Rebuild Your Credit Score

Whether you had a recent late or missed payment or there was a change to your credit limit or usage, there are plenty of reasons your credit score may have dropped. Here are six ways to focus your efforts and start rebuilding your credit score.

1. Review your credit reports for inaccuracies.

Improving your credit score starts with a careful review of the information found in your credit reports from the three nationwide credit reporting companies: Experian, Equifax, and TransUnion. You can get a free printed copy of each of your credit reports every 12 months at Equifax offers six additional free credit reports every 12 months, through December 31, 2026. When you visit the site, you may see steps to view more frequently updated reports online which gives you greater ability to monitor changes in your credit.

Carefully review your reports for inaccuracies such as incorrect account status, accounts listed twice, inaccurate credit limits and payment history, someone else’s information mixed in with your file, or other concerns. If you find inaccurate information, it may be bringing your score down. If you do, file a dispute both with the company and with the credit reporting agency.

2. Pay your bills on time.

Your payment history is one of the most important factors in determining your credit score. Even one late or missed payment can have an impact. Credit reporting companies generally report most negative information for up to seven years, so it’s important to have a system (like auto pay) in place to ensure you pay on time each month. If you have any past due accounts, bring them current as quickly as possible, and make it a priority to make your payments on time each month going forward.

3. Leave your old credit accounts open.

Once you pay off a credit card balance, it’s natural to consider closing the account—especially if you’re attempting to curtail a history of overspending on credit cards. However, if it’s a card you’ve had open for a long time or that has a high credit limit, it may help your credit score to keep it open. Closing a card account lowers your total available credit. This can lead to a higher credit utilization ratio which can have a negative impact on your credit score. Of course, if you have a compelling reason to close a credit card account (such as due to a high annual fee), you don’t have to keep it open, but keep in mind closing it may affect your credit score.

4. Keep your credit balances to 30% or less of your available credit.

Ideally, you’re able to pay off your credit card balance in full every month to avoid finance charges. However, if you carry large balances from one month to the next, it could signal a problem with how you’re using credit. Because carrying high credit card balances can indicate a higher credit risk, when you’re rebuilding your credit, experts recommend using no more than 30% of your total credit limit on any card. Using less is even better.

While using a debit card doesn’t help rebuild your credit, you might consider reaching for one instead of a credit card when you need to make a purchase, especially if that debit card offers rewards.

5. Avoid multiple applications for new credit.

Applying for too much new credit (hard credit inquiries) in a short period of time could be seen as a sign you’re trying to take on more debt than you can reasonably manage. Opening new credit also lowers the average age of your total accounts, which lowers your length of credit history and may adversely impact your credit score. However, if that new credit is for debt consolidation and reduces high interest debt, this may have a positive impact on your credit score.

If you need to apply for more credit while you’re rebuilding your credit score, be strategic about when, how, and who you apply with. If you have a close friend or relative with good credit who is willing to add you as an authorized user on their credit card, or cosign on an auto or personal loan with you, it may help you qualify for better terms and interest rate and potentially have less of an impact on your credit score overall. Another alternative is using a secured card. With most of these cards, you start with a small credit line and you put an amount equal to it in an account as a deposit. It may be another way to help you establish a credit record.

6. Maintain a diverse mix of credit accounts.

Building and maintaining a variety of credit accounts (such as credit cards, mortgages, and installment loans) demonstrates well-rounded and responsible credit usage and contributes to a more comprehensive credit profile. Over the long term, having a diverse mix of credit accounts is worth taking into consideration as you rebuild your credit. Taking a balanced and calculated approach to borrowing and showcasing financial competence through your ability to manage different types of credit and repayment terms can have a positive impact on your credit score.

Generally, it might take several years to establish a well-rounded credit profile with a mix of different types of credit accounts. With patience and consistent responsible credit management, you can successfully build and maintain a diverse credit profile over time.

The Bottom Line

Rebuilding your credit score is a gradual process that involves adopting some simple yet effective strategies. By consistently paying bills on time, reducing credit card balances, watching your credit utilization, and diversifying your credit mix, you can lay a strong foundation for improving your credit score over time. Monitoring your credit report for errors and practicing responsible credit behavior will further contribute to improving your credit score. While the journey may require patience and persistence, the result of a healthier credit score can open doors to better financial opportunities and greater peace of mind.

You May Also Like

Related Resource Center
With the cost of consumer goods increasing, many Americans have less available cash to pay down credit card balances. At the same time, rising interest rates make carrying a balance on your credit cards even more expensive.
Mar 27, 2023
6 Ways to Pay Off Credit Card Debt Fast | RC
According to the FTC, Americans reported losing almost $8.8 billion to fraud in 2022—a 30% increase over the prior year. Given that more people are shopping online and with their phones, it’s not surprising that nearly half of all reported fraud cases were related to online banking.
Mar 20, 2023
blog bankfraud
Financial goals can help you lay the groundwork for your financial plan and work toward long-term financial security and independence. Setting financial goals can also change how you look at your income opportunities and spending habits, helping you align your behavior with what’s most important to you.
Feb 1, 2023
Understanding how to pay your bills on time is an important part of effective money management. Not only does timely bill payment impact your credit score, late and missed payments could cause penalty interest rate increases, late fees, or your account to be sent to collections. Having a pattern of not paying bills on time could also result in credit denials, or higher interest rates when applying for loans or credit cards.
Jan 30, 2023
6 Steps to Paying Bills on Time | RC
If you believe that your wealth and opportunities are limited, and fear you’ll never have enough, your mindset could be directly impacting your money and your life. Whether it stems from your upbringing, or the widespread job and income losses brought on by the pandemic, a money scarcity mindset can cause you to focus only on what you lack, and keep you from moving forward or achieving personal and financial success. Fortunately, there are ways to overcome and let go of scarcity beliefs around money–and shift your perspective toward abundance. Learn what a scarcity mindset is, how it can keep you from achieving your financial goals, and practical steps to transform your attitude and take charge of your financial life.
Dec 5, 2022
blog shiftingmindset
Related Impact
From groceries and diapers to Halloween costumes for pets, nearly 60% of American consumers prefer to shop online for everyday items that make life more convenient, comfortable, and enjoyable. And with rising prices showing no signs of stopping anytime soon, we’re pleased to introduce StackitTM from LendingClub Bank—a new browser extension that automatically finds and rewards eligible members with coupons and cash back for extra savings at more than 15,000 favorite online retailers.
Nov 13, 2022
blog header stackit 765x430 v1-1
Even in today’s low-yield, high-inflation environment, it’s essential to keep a certain amount of money in an easy-to-access checking or savings account for things like daily household and emergency expenses, or to meet short-term financial goals.
Oct 2, 2022
LendingClub Rewards Checking Nationally Certified as Trusted, Afforda
Since 2007, LendingClub has been on a mission to deliver a world-class experience to all our members. This month we took a moment to reflect on the more than four million members who have chosen LendingClub as their partner to help them reach their financial goals.
Apr 19, 2022
Illustration of large number 4 and letter M made up of colorful, tiny illustrations of ethnically diverse people
In March 2022, we hosted our first quarterly webinar where we celebrated our one-year anniversary as a digital marketplace bank. 
Mar 6, 2022
LendingClub completed the acquisition of Radius Bank in February 2021. At that time, in addition to the direct-to-consumer deposit business, we inherited a fintech partner program, and several lending businesses. As we reach the one-year anniversary of the acquisition, and in conjunction with the conclusion of a strategic review of our business operations, we have made the decision to discontinue certain businesses that don’t fit our mission.  
Jan 2, 2022
Man in blue button up shirt and glasses smiling
Related FAQ's
LendingClub provides a year-end statement that summarizes your account activity, including how much interest you’ve earned and information regarding Notes tied to loans that have been charged off.
Jun 7, 2023
Once you’ve submitted your application, we’ll try to confirm your information on our own. Sometimes, you may need to submit a few documents to confirm your identity, income, or vehicle ownership.
An important step in refinancing your auto loan is updating your vehicle title with your new lender's name.
Once you submit your Auto Refinance application, we may ask you for additional paperwork to verify your information.
We make refinancing your car fast and simple. The process may take up to 15 business days.
Related Glossary
{noun} A type of credit that allows the borrower to make charges and payments against a set borrowing limit, paying interest only on outstanding balances.
Sep 6, 2023
{noun} The amount of unpaid interest that has accumulated as of a specific date, either on a loan or an interest-bearing account or investment. 
Mar 21, 2023
{noun} The total annual cost to borrow money, including fees, expressed as a percentage.
Mar 21, 2023
A debt that is written off as a loss because the financial institution or creditor believes it is no longer collectible due to a substantial period of nonpayment.
Feb 7, 2023
{noun} An interest rate that remains the same for a set time, usually for the life of the loan.
Feb 4, 2023
Change Your Money, Change Your Life
Join our monthly newsletter for tools, tips, and insights to improve your financial health.

LendingClub Bank and its affiliates (collectively, "LendingClub") do not offer legal, financial, or other professional advice. The content on this page is for informational or advertising purposes only and is not a substitute for individualized professional advice. LendingClub is not affiliated with or making any representation as to the company(ies), services, and/or products referenced. LendingClub is not responsible for the content of third-party website(s), and links to those sites should not be viewed as an endorsement. By clicking links to third-party website(s), users are leaving LendingClub’s website. LendingClub does not represent any third party, including any website user, who enters into a transaction as a result of visiting a third-party website. Privacy and security policies of third-party websites may differ from those of the LendingClub website.

Savings are not guaranteed and depend upon various factors, including but not limited to interest rates, fees, and loan term length.

A representative example of payment terms for a Personal Loan is as follows: a borrower receives a loan of $19,854 for a term of 36 months, with an interest rate of 10.29% and a 6.00% origination fee of $1,191, for an APR of 14.60%. In this example, the borrower will receive $18,663 and will make 36 monthly payments of $643. Loan amounts range from $1,000 to $40,000 and loan term lengths range from 24 months to 60 months. Some amounts, rates, and term lengths may be unavailable in certain states. 

For Personal Loans, APR ranges from 9.57% to 35.99% and origination fee ranges from 3.00% to 8.00% of the loan amount. APRs and origination fees are determined at the time of application. Lowest APR is available to borrowers with excellent credit. Advertised rates and fees are valid as of July 11, 2023 and are subject to change without notice. 

Checking a rate through us generates a soft credit inquiry on a person’s credit report, which is visible only to that person. A hard credit inquiry, which is visible to that person and others, and which may affect that person’s credit score, only appears on the person’s credit report if and when a loan is issued to the person. Credit eligibility is not guaranteed. APR and other credit terms depend upon credit score and other key financing characteristics, including but not limited to the amount financed, loan term length, and credit usage and history.  

Unless otherwise specified, all credit and deposit products are provided by LendingClub Bank, N.A., Member FDIC, Equal Housing Lender (“LendingClub Bank”), a wholly-owned subsidiary of LendingClub Corporation, NMLS ID 167439. Credit products are subject to credit approval and may be subject to sufficient investor commitment. ​Deposit accounts are subject to approval. Only deposit products are FDIC insured.

“LendingClub” and the “LC” symbol are trademarks of LendingClub Bank.

© 2023 LendingClub Bank. All rights reserved.