Let’s be honest, credit repair can be a little confusing. And overwhelming. We all know it’s important to have a good credit score, but some of us might not be sure how to improve our poor credit scores, or even why we need to.

Making things even tougher, going through major life changes can be really hard on your credit score. And let’s be real, your twenties and thirties are full of major life changes!

If you’re struggling, just know that you’re not alone. I’ve been there too! Luckily there are plenty of resources and credit repair tips out there to help you turn things around.

In this post, I’m sharing tips for how to repair your credit during major life changes (or really any time)!


How to Repair Your Credit During Major Life Changes


My Credit Journey

My credit journey has been a bit of a tumultuous one so far. I’ve gone through a lot of major life change in my adult life so far, and major life changes can really take a toll on your credit.

When I graduated from college, I was where I assume a lot of my peers were around the same age. I had a ton of student loan debt and a relatively low income.

Things turned around a bit though. Sure, my income was still low (I work in public service, after all). But I got married pretty young and my husband had a good income.

My credit score had increased pretty steadily since college, and over the next two years, we purchased multiple cars and a house, all of which went onto my credit report.

And then we got divorced.

I had to apply for apartments while still having a mortgage on my credit report. I had to refinance my car loan while I had two car loans on my credit report. And I had to take out a credit card to help finance my moving expenses.

Needless to say, it wasn’t great for my credit score.

This is around the time I really dove into learning everything I could about personal finance, including how to repair my credit. And over the past two years, I’ve been able to take what I learned and make real progress toward credit repair.

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How Credit Scores are Calculated

Credit scores are a mystery to a lot of people. They know they have one, and they know it’s important to have a good credit score. But they aren’t really sure how to improve their credit score, or even how it’s calculated.

Honestly, I was the same way. Prior to getting divorced, I really didn’t pay much attention to my credit score! I probably checked the number on a semi-regular basis, but I definitely couldn’t have told you what went into it.

Your credit score is made up of five major components:

  • Payment History: This makes up 35% of your credit score, and shows your history of paying your debt payments.
  • Credit Utilization: This makes up 30% of your credit score, and shows the amount of debt you carry in relation to your credit limit.
  • Length of Credit History: This makes up 15% of your credit score, and shows how long you have had active credit accounts.
  • Types of Credit: This makes up 10% of your credit score, and shows the different types of credit accounts on your credit report.
  • Credit Inquiries: This makes up 10% of your credit score, and shows the number of hard inquiries to your credit report.

Since there are a number of different factors that all play a role in making up your credit score, make sure you’re paying attention to all five in your own life. They can all make a difference!

In my own experience, there were some areas I was doing really well. But then there were some areas where I definitely could have been doing better, and those were damaging my credit score. Just having the information made a big difference!

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Why Your Credit Score is Important

I’m pretty sure most of us know that our credit score is important. I know I did, but that’s where my knowledge ended. I didn’t know why it was important. And I know this is something other people struggle with as well!

Your credit score is incredibly important in determining how likely you are to be able to take out loans in the future, as well as the interest rate you’ll get on those loans. Essentially, it gives the lender an idea of how likely you are to pay them on time every month.

Your credit score also helps landlords determine whether to rent an apartment to you and whether you’ll be likely to actually pay your rent every month.
Basically, if you ever see yourself wanting to rent an apartment, buy a car or house, take out a business loan, etc., your credit score is seriously important!

And when you’re going through major life changes, it’s pretty likely you’re going to need to do some of those things. When it came to my divorce, I was applying for an apartment, refinancing my car loan, and taking out a new credit card all at once. And it definitely took a toll on my credit. And had my credit score not been in decent shape before then, I wouldn’t have been able to do all of those things.


How to Increase Your Credit Score


Check Your Credit Report

The three credit bureaus are required to provide you with a free credit report annually if you request one. And these days there are so many apps and websites that allow you to check your credit report at the drop of a hat.

Knowledge is power, and the most important first step in repairing your credit is knowing exactly what is on your credit report.


Pay Your Bills on Time

Since your payment history is the most significant factor making up your credit history, it’s essential that you have a clean payment history. This means making every single payment on time every single month.

Keep in mind that late payments stay on your report for seven years, so your credit score isn’t going to be magically fixed right away. But it will prevent your credit score from getting even worse.

The better your record of paying your bills on time, the better your credit score will be.


Pay Off Debt to Keep Your Credit Utilization Low

Your credit utilization ratio is another important factor in determining your credit score. Because of that, try to pay down some of your debt quickly so you are using a smaller percentage of your available credit.

Less than 30% is considered ideal for a credit utilization ratio. So if you can get it below that number, then you’re in good shape!

Related Article: 25 Creative Ways to Save Money


Stop Applying for New Credit

Hard inquiries are a hit on your credit report. And while it might seem like applying for new credit would be helpful because you may improve your credit utilization ratio, it’s also counterproductive because you’re just putting the negative hit somewhere else.

At this point in the process, it’s better to focus on making your payments on time and paying off as much debt as you can.


Check Your Report for Errors

When you check your credit report, make sure to be thorough about checking for errors. Mistakes can slip through, especially if you have a number of negative marks on your report and might not notice one extra one. However, you’d be surprised how many people are denied loans for homes and cars due to errors on their credit report!

Late payments and derogatory marks can stay on your report for seven years, so it’s definitely better to fix it as soon as possible than to just let it fall off on its own.


How Long Does it Take to Repair Your Credit?

The number one question I heard from people, outside of what they need to do to repair their credit, is how long it’s going to take. I definitely understand wanting to move the process along, because a bad credit score can really hold you back!

Unfortunately, you have to give it some time. Negative information stays on your credit report for seven years, meaning your credit score can’t fully recover until that information is gone.

The good news is there are things you can do to change your credit without, even as some negative marks remain on your credit report. And by following all of the credit repair tips above, it’s definitely possible to start turning your credit score around within a year!

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Final Thoughts

Major life changes can take a serious toll on your credit score. And going through the process of repairing your credit can definitely be daunting, but just know there are credit repair tips, resources, and people who can help. By really prioritizing your finances, you’ll see that credit score start to move in the right direction!