Pay bills and any existing lines of credit on time if you possibly can. Paying only the minimum is fine, if that’s all you can manage. If you see it’s not possible to pay at least minimums, contact your creditor to see if other arrangements can be made, at least for now.

 

Why: Your payment history is the single biggest factor affecting your credit score. When you are rebuilding credit, you cannot afford to have a payment reported as late.

Late payments stay on your credit reports for up to 7½ years, so these take longer to recover from than some other credit missteps.

If some bills have already gone to collections, prioritize the ones where your account is still open. Collectors may make the most noise, but they aren’t your top priority.

 

“Credit utilization” is credit-speak for the percentage of your credit limit you’re using. The amount you use has a powerful effect on your credit score — only paying on time matters more.

 

Most experts recommend going no higher than 30% of the limit on any card, and lower is better for your score. Check the credit utilization for all your credit cards (you can do this by viewing your credit score profile from our credit monitoring partner) and focus on bringing down the highest ones. As soon as your credit card issuer reports a lower balance to the credit bureaus, your score can benefit. Your score will not be hurt by past high credit utilization once you’ve brought balances down.

 

This product is typically for people who want to build credit from scratch. If your credit card accounts have been closed, you may need to start over with a secured credit card. These cards require a deposit upfront. That deposit is typically your credit limit, but then they work like any other credit card. Choose one from an issuer that reports payments to all three major credit-reporting bureaus.

 

As the name suggests, a credit-builder loan has one purpose: to help you improve your credit profile. You’re most likely to find one at a credit union or community bank. You’ll need to be a member or customer, and you’ll have to show proof of income and ability to repay. The lender holds onto the money as you repay, then releases it to you once you have fully repaid the loan.

 

If you have money on deposit, you might be able to borrow against that with a share- or certificate-backed loan. This is a type of secured loan, backed by money in your savings, money market or CD account. The bank or credit union puts a hold on the money until you repay. Some financial institutions release the funds incrementally as you pay down the balance.

 

Your payments are reported to the credit bureaus, so be sure to pay on time — a late payment will damage your credit.

 

You can ask someone to add you as an authorized user on a credit card. Your credit benefits just from being on the account; you don’t have to make any charges or access the account. A few cards allow primary cardholders to set spending limits for authorized users, which could make the account holder feel more comfortable about adding you. You could also ask someone to add you without actually giving you a card or card number.

 

Two things to be aware of: The impact on your score may be modest, because you aren’t legally responsible for debts on the account. And being an authorized user can also hurt your score if the account holder doesn’t pay the bill on time, so ask someone with good credit habits.

 

If you’re having a hard time getting access to credit, ask a family member or friend to co-sign a loan or credit card. This is a huge favor: You’re asking this person to put his or her credit reputation on the line for you and to take full responsibility for repayment if you don’t pay as agreed. The co-signer may also be turned down if they apply for more credit later because this account will be considered in assessing their financial profile.

Use this option with caution, and be certain you can repay. Failure to do so can damage the co-signer’s credit reputation and your relationship.