How to Rebuild Your Credit in 12 Months: A Complete Plan for 2025

Having damaged credit negatively impacts your financial health, making it harder to qualify for mortgage loans and other debt at reasonable interest rates. Even if your credit is poor, you can rebuild your score over time. This opens the door to refinancing your mortgage, securing better rates, and saving more money each month.

If you're a BlueHub SUN client, you’re already on a path toward financial stability. The SUN program is a temporary solution—a steppingstone that gives you time and resources to rebuild your credit and finances. We encourage clients to prepare for the next step: exiting the program by refinancing or selling their property.

If you have a shared appreciation mortgage (SAM), it is important to remember that home values and appreciation may grow over time. Cleaning up your credit as soon as possible allows you to assess your options for paying off your SAM when the time is right. Over 40% of SUN clients have fully paid off their mortgage—and, if applicable, their SAM—successfully exiting the program and achieving greater financial stability These participants had an average of $150,000 in equity when they exited the SUN program.

This guide offers actionable, easy-to-follow credit improvement tactics. Rebuilding your credit is an essential step toward refinancing into a conventional mortgage with better terms. Even if you're not a SUN client, these steps will help you restore your credit and take control of your financial future. Small, consistent actions over time can lead to big results.

Obtain free credit reports from the three major bureaus at AnnualCreditReport.com, available weekly in 2025. Check for errors and dispute issues using each bureau’s process to improve your score.
Credit reports don’t include FICO® scores, which lenders use for mortgage eligibility. Order these separately for a small fee or access them through a bank, credit card issuers, or subscription services.
Use credit monitoring tools or subscribe to a reputable service for real-time alerts and monthly tracking throughout this process.

Use a tool like Experian’s credit card repayment calculator to organize your payments and target paying off balances faster.
Choose a debt repayment strategy that works for you, such as the “debt snowball” (smallest balances first) or “debt avalanche” (highest interest first) methods.
Dedicate extra income—like from a side job or tax refund—toward debt repayment while ensuring you stay current on all accounts by making at least minimum payments on time.
Building positive payment history is key, as lenders will review this when you refinance.

Payment history accounts for 35% of your FICO® score, so making on-time payments each month is key to rebuilding your score.
Use automatic payments or reminders to ensure all bills—like credit cards, loans and utilities—are paid on time.
Consistency builds trust with lenders and strengthens your score.

Credit utilization refers to the percentage of your total available credit that you’re using. Keeping this ratio under 30%—and ideally below 10%—is critical for improving your credit score.
Focus on paying down credit card balances to reduce your utilization. This demonstrates responsible credit use and boosts your score.
If needed, consider balance transfer credit cards with 0% introductory APR offers, but use them responsibly to avoid accumulating new debt.

Ask a trusted family member or friend with a great credit score to add you as an authorized user on their credit card. As they pay on time, this can help supplement your credit history with positive entries on your credit report.
Adding positive entries to your credit report makes any negative ones less impactful over time.
This strategy is solely for rebuilding your credit, so avoid making purchases on this card unless you can pay the balance in full each month.

Request updated reports from the three bureaus and compare your scores.
Address any remaining inaccuracies or disputes. This step is especially important if you don’t see significant improvements in your FICO® scores that could result from correcting mistakes on your credit reports.
This mid-year check ensures you’re on track toward rebuilding your credit.

Identify lingering negative items still on your credit reports, such as collections, past-due accounts or amounts owed. Contact creditors to negotiate payments or request “pay-for-delete” agreements, where they agree to remove the account after payment.
For complex issues, consult a certified credit counselor in your area. To avoid scams, ensure the counselor is government-certified and reputable. Here are some trusted options:
- BK Credit Consultants – Brian Blackmore
  https://bkcreditconsultants.com/
  469-865-4506 | Info@bkcreditconsultants.com
- American Consumer Credit Counseling
  https://www.consumercredit.com/
  800-769-3571
- Family Credit Management
  https://www.familycredit.org/
  800-994-3328

Apply for secured credit cards or credit-builder loans to help establish or rebuild your credit history.
Use only a small portion of your available credit limit and pay balances in full each month to demonstrate responsible credit usage.
Look for secured cards from major issuers that report to all three credit bureaus, ensuring your efforts positively impact your credit score.

When possible, request a credit limit increase from your credit card issuer.
A higher limit reduces your credit utilization ratio instantly, as long as your spending remains stable.
Avoid using additional credit to maintain the benefits of a lower utilization ratio.

As you follow this strategy, your credit card and loan balances will shrink, and new positive entries will appear on your credit reports. Review your credit reports every four months to monitor your progress.
Consider consulting a HUD-approved 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.
Lenders typically want at least 12 months of on-time mortgage payments to consider refinancing.

Contact your lenders and credit card companies to make sure they have your correct contact information. This helps them reach you easily about your accounts.
Check in with your creditors regularly. This shows you’re managing your accounts responsibly and builds trust.
During these calls, you can also ask for tips on how to improve your credit standing.

Compare your current credit scores with those from a year ago to see how much you’ve improved.
Use your improved credit to refinance your mortgage or take advantage of better financial opportunities.
Continue following the steps above to maintain your progress and build long-term financial health. Good habits like paying on time and managing debt responsibly will keep your credit strong.

Stay on Track

Your financial journey doesn’t end here. Use this roadmap every year to monitor your credit, refine your strategy and prepare for key milestones. Rebuilding your credit is a marathon, not a sprint—but with persistence, you’ll reach the finish line stronger than ever.

How to Rebuild Your Credit in 12 Months: A Complete Plan for 2025

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How to Rebuild Your Credit in 12 Months: A Complete Plan for 2025

Get Copies of Your Credit Reports and Learn Your FICO® Scores

Month 2: Use a Detailed Payoff Plan

Month 3: Continue Paying All Bills on Time

Month 4: Lower Your Credit Utilization Ratio

Month 5: Become an Authorized User

Month 6: Review Progress with Updated Credit Reports

Month 7: Address Negative Items

Month 8: Open Credit-Building Accounts

Month 9: Request Credit Limit Increases

Month 10: Check Readiness for Refinancing

Month 11: Maintain Proactive Communication with Creditors

Month 12: Celebrate and Assess Progress

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