How to Rebuild Your Credit in 12 Months: A Complete Plan for 2026

• Start by understanding where your credit currently stands.
• Get your free credit reports from Equifax, Experian and TransUnion at AnnualCreditReport.com.
• Review each report carefully for errors, such as late payments you didn’t miss, incorrect balances or accounts you don’t recognize.
• Dispute any mistakes directly with each bureau.
• Your credit report doesn’t include your FICO® score, so get your score from your bank, credit card issuer or a reputable credit monitoring service. For example, Credit Karma offers free credit monitoring and provides score information without a hard inquiry.

Knowing your credit baseline helps you track your progress throughout the year.

Reducing debt is one of the most effective ways to improve your credit.

• Use a debt repayment calculator to organize your plan.
• Choose a payoff strategy that motivates you:
  • Debt Snowball: Pay off the smallest balance first.
  • Debt Avalanche: Pay off the highest interest debt first.

• Use any extra income—such as a tax refund or side-job earnings—to make larger payments.
• Always pay at least the minimum on time to build a positive payment history.

• Payment history accounts for 35% of your FICO® score, so making on-time payments each month is key to rebuilding your score.

To stay on track:

• Set up automatic payments or reminders.
• Pay all bills—credit cards, loans utilities—by their due dates.
• If you miss a payment, pay it as soon as possible and contact the lender to see if they can stop reporting it as late.

Consistency builds trust with lenders.

Your credit utilization ratio is the percentage of available credit you’re using. Keeping it low strengthens your score.

• Aim to keep utilization under 30%, and ideally under 10%.
• Pay down credit card balances whenever possible.
• Avoid running up balances again after paying them down.
• If needed, consider a 0% introductory APR balance-transfer card, but use it wisely to avoid new debt.

• Being added as an authorized user on someone else’s credit card can boost your credit.
• Choose someone who has a strong payment history and low balances.
• You don’t need to make purchases for this strategy to work.
• Their positive history may help your score, especially if your credit file is thin.

Halfway through the year, it’s time for a check-in.

• Pull updated credit reports from AnnualCreditReport.com.
• Make sure any previously disputed errors were corrected.
• Compare your current balances, payment history and credit utilization to earlier in the year.

This midpoint review helps you stay focused.

Collections or past-due accounts can hold your credit score back.

To address them:

• Confirm the debt is accurate.
• Negotiate a payment plan or settlement.
• Some creditors may agree to stop reporting the debt once paid (not all do).
• Always get agreements in writing.

For complex issues or general support, consult a certified credit counselor in your area. To avoid scams, ensure the counselor is government-certified and reputable

New positive credit activity can help.

Consider:

• A secured credit card
• A credit-builder loan
• A credit-building debit card
  • Some notable options include: Experian Smart Money, Extra, Varo

Use them responsibly:

• Charge only small amounts
• Pay off the full balance every month
• Confirm the lender reports to all three credit bureaus

This helps build or rebuild strong credit history.

If you’ve made consistent on-time payments, your credit card issuer may raise your limit.

• A higher limit lowers your credit utilization ratio.
• Keep your spending the same to maintain the benefit.
• Ask if the credit limit increase can be done without a hard inquiry. Some credit lenders, such as Capital One, only do a soft inquiry for credit limit increase requests.

As you improve your credit, refinancing your mortgage may become an option.

• Review your credit and payment history.
• Many lenders require at least 12 months of on-time mortgage payments.
• Talk with a trusted housing counselor who can help clients with poor credit refinance and provide tailored advice. Speaking with an expert may also help you secure better rates.

If you need extra support, you can talk with a certified nonprofit credit counselor. Many organizations like the National Foundation for Credit Counseling and American Consumer Credit Counseling offer free or low-cost help with budgeting, debt and credit rebuilding.

Staying connected helps prevent surprises.

• Confirm that lenders have your correct contact information.
• Check in about account status or upcoming changes.

Ask if they have suggestions for improving your credit standing. Clear communication supports responsible credit management.

• Compare your new credit scores to where you started.
• Celebrate improvements in your credit habits and financial health.
• Set new credit or savings goals for next year.

Good credit comes from consistency. Every responsible step you take helps keep your financial future strong.