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Credit Building

9 ways to rebuild bad credit

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First things first—a bad credit score doesn’t say anything about you as a person. The last few years have thrown a lot at all of us, and damaged credit is an unfortunate side effect of tough times for many.  

Fortunately, like many things in life, credit is fixable. Armed with a bit of know-how, you can not only repair your credit over time, you can also position yourself for a brighter financial future and greater long-term stability. 

Before getting to the steps below, here’s a little FYI—you can start building your credit today with a Varo Believe Secured Credit Card, with no minimum security deposit, no annual fee or interest, and no hard credit check to apply.

Check your credit report

Having good credit can open a lot of doors in terms of better rates on loans, credit cards, housing opportunities, and even insurance. In a nutshell, the higher it is, the more it benefits you.

Regularly monitoring your credit report is one of the best places to start when it comes to repairing it.

Federal law requires all 3 major nationwide credit bureaus that watch over your credit (Equifax, Experian, and TransUnion) to give you a free copy of your credit report every 12 months when requested. To get a copy of your annual credit report online, visit

Next up? Figuring out your credit score (which doesn’t appear on your credit report).

Get your credit score

All three credit bureaus look at what’s on your credit report to come up with a numbered rating of your payment and borrowing history. This is your credit score, which ranges from 300 to 850.

A bad credit score depends on which credit bureau you’re looking at:

  • Experian and Equifax: Under 669 is fair or low

  • TransUnion: Under 658 is fair or low

You can also get your FICO credit score from, or from many credit card providers or banks.

Raise your credit

Even a few small changes can go a long way towards increasing your credit score. Here are 9 steps to get the ball rolling on rebuilding your credit so you can empower your financial future.

1. Fix incorrect info on your credit reports

Start by looking for anything that’s not right when you check your credit reports. This could be anything like a wrong address, a credit account that you didn’t open, or an unsolicited hard credit check (when a lender pulls your credit report because you've applied for new credit). Dispute anything that isn’t right directly with the credit bureau.

2. Make payments on time

On-time payments for things like loans and credit cards make up the majority of your credit score. Although a late payment can stay on your record for a few years, it’s not forever. Making sure you pay at least the minimum amount every month can provide a boost to your score.

3. Keep your credit card balances low

Another large part of your credit score depends on how much debt you have on your credit cards, or your credit utilization ratio. Simply put, the closer you are to your credit limit, the greater the negative impact on your credit score. Try to get your balances as low as possible and as far from your upper credit limit as you can manage.

4. Pay off some debt

Relax—you don’t have to pay off every penny of debt to make a difference. Even starting with paying off credit cards or loans bit by bit can help raise your credit score over time.

5. Don’t open several new accounts at once

Every time you apply for a new loan or credit card, the lender performs a hard credit check. Each of these credit checks will lower your score by a few points. Plus, taking out more than one loan at a time can make you look like a riskier customer.

6. Consider a Varo Believe Secured Credit Card

Remember what we said about hard credit checks? The Varo Believe Secured Credit Card offers no hard credit check to apply, no minimum security deposit, and no annual fee or interest. It can potentially help you build your credit and keep track of your progress, provided you are responsible with your spending and make on-time payments. Qualifications apply1.

7. Transfer debt to one credit card

Believe it or not, you can increase your credit score by moving all of your credit debt to a single card. For example, it’s better to have $420 in debt on one card rather than $20 on one card and $400 on another.

8. Keep your old credit cards open

When you decide to stop using a credit card, it can be tempting to want to close the account to simplify your life—but hold that thought. Keeping it open can help with your credit history, which directly affects your credit score. Simply put, more years of credit equals a higher credit score.

9. Use Experian Boost

Did you know that paying your utility and cell phone bills on-time can now count toward your credit score? Experian Boost®2 is a free service that takes your bill payments and adds them to your Experian credit report. In fact, the average user gets an instant 13-point increase in their credit score.

How long will it take?

Remember, rebuilding credit is absolutely doable, but it’s a process. In most cases, you’ll have to be patient to see an impact on your credit score. Aside from a potential immediate increase from Experian Boost® (results may vary), most methods take longer to make a difference. Don’t be discouraged by a lack of visible changes in the short term. Instead, focus on the bigger picture—celebrating a higher credit score down the road and building a better financial future.

To be eligible to apply for the Varo Believe Card, you need to have received Incoming Deposits of $200 or more in the past 31 days to your Varo Bank Account and/or Savings Account. Incoming Deposits include any deposit into your Varo Bank Account and/or Savings Account from any source outside of Varo, Varo to Anyone transfers between Varo customers, and final dispute credits.

2 Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more. Results will vary. Not all payments are boost-eligible. Some users may not receive an improved score or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost®. 

Unless otherwise noted above, opinions, advice, services, or other information or content expressed or contributed by customers or non-Varo contributors do not necessarily state or reflect those of Varo Bank, N.A. Member FDIC (“Bank”). Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s) other than Varo.


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