Thanks for sticking with me! Over the past two “Common Cents” columns, I’ve covered a lot of ground. You’ve learned why having good credit is important and how it opens doors, how to receive your free credit report, what a credit report consists of, and how a FICO® score is computed.

Now that you have your credit report in hand (or on screen), hopefully you’ve reviewed it thoroughly for errors. Instructions on how to dispute incorrect information is included in every credit report. I encourage you to follow those steps. Mistakes such as incorrect balances, accounts that don’t belong to you, or outdated negative information can unfairly lower your credit score. Credit bureaus are required to investigate disputes and correct any verified inaccuracies. Removing incorrect negative items can sometimes result in a quick improvement to your credit score. 

I had a personal experience with this back in the early 2000s when someone’s defaulted credit card was incorrectly connected to my credit profile. I filled out the dispute form and mailed it in, and several weeks later I received a letter stating that the credit bureau’s investigation revealed what I already knew – that I did not apply for, utilize, or default on that credit card. They removed the information from my credit profile and – like magic – my credit score improved by 60 points!

Let’s say that you now have your FICO® score. Either you’ve paid to receive your credit score – or perhaps your monthly credit score is a perk of having a particular bank account or credit card. You can usually find your FICO® score within the credit card app. My card has a section for monitoring my credit health, which not only allows me to see my credit score, but also my full credit report.

So what’s the score? Your FICO® score is…drum roll, please…645. Well what does that mean? In the last column, I covered that the base FICO® scores range from 300 to 850, and the good credit score range is 670 to 739. (Experian, What is a Good Credit Score?). The higher the number, the better. So with a 645, it looks like you have some work to do. Let’s get started.

The good news is that credit scores aren’t permanent. With the right strategies, patience, and consistent financial habits, it’s possible to rebuild your credit and achieve a healthier financial future. Taking deliberate steps to improve your credit can make a significant difference in your ability to borrow money, qualify for housing, and even secure better insurance rates.

Payment history is the single most important factor in determining your credit score. Consistently paying your bills on time shows lenders that you’re responsible with credit. Since you’re rebuilding your credit, making every payment on time should become your top priority. Setting up automatic payments or reminders can help ensure that you never miss a due date. Even one late payment can have a noticeable impact on your score, so consistency is essential.

Reducing outstanding debt is another critical step in improving your credit score. Credit utilization, which is the percentage of your available credit that you’re using, plays a major role in credit scoring models. Ideally, you should aim to keep your credit utilization below 30 percent of your available credit limits. For example, if you have a credit card with a $1,000 limit, keeping your balance below $300 can help your score. Paying down existing balances not only lowers utilization but also reduces the amount of interest you pay over time.

Opening a secured credit card can be a helpful tool for rebuilding credit. A secured credit card requires a cash deposit that serves as collateral for the credit limit. Because the lender has this deposit as protection, approval is generally easier, even for people with poor credit. By using the card responsibly and making on-time payments, you can establish positive credit history that helps raise your score. Once you decide to cancel that card, you will get your full deposit back – as long as you closed the card account with a $0 balance. 

Another strategy for rebuilding credit is becoming an authorized user on someone else’s credit card account. If a trusted friend or family member adds you to their account and the account has a strong payment history and low balance, the positive information may appear on your credit report. This can help improve your credit history and boost your score. However, it’s important that the primary cardholder continues to manage the account responsibly, since negative activity can also affect your credit.

Avoid applying for too many new credit accounts at once. Each credit application typically results in a hard inquiry on your credit report, which can slightly lower your score. It’s perfectly fine to say NO, THANK YOU when a retailer asks you if you would like to apply for their credit card – even if you’d save 15% on your purchases that day. Multiple inquiries in a short period may signal financial distress to lenders. Instead, focus on maintaining and responsibly managing the accounts you already have. 

Patience is one of the most important aspects of rebuilding credit. Negative information, such as late payments or collections, generally remains on your credit report for up to seven years. However, the impact of these items decreases over time as new positive payment history is added. By consistently demonstrating responsible credit behavior, your credit score can gradually improve.

Good financial habits also support long-term credit health. Creating a realistic budget, building an emergency savings fund, and avoiding unnecessary debt can help prevent future credit problems. When you manage your finances carefully, you reduce the likelihood of missed payments or high credit balances that could harm your score.

Rebuilding your credit won’t happen overnight, but steady progress can lead to meaningful improvements. By reviewing your credit report, correcting errors, paying bills on time, reducing debt, and using credit responsibly, you can gradually restore your credit profile – and move that score higher up on the scale. Trust me – you’ll be glad you did.

Tracy L. Campbell is a partner and financial advisor at Meriwether Wealth and Planning, an independent Registered Investment Adviser (RIA) firm headquartered in downtown Minden, La. E-mail Tracy at tracy@meriwether.com. Disclaimer: This content is for general knowledge and education, not a substitute for professional advice.