Building Credit

Credit repair specialists work with consumers to clean up their credit reports and improve their credit.

Credit repair is the practice of improving your credit through a variety of methods including correcting errors on your report, consolidating debt, paying down balances, tracking your credit score, and building good habits like keeping your credit balances lowing and making on-time payments.

A credit-builder loan emphasizes building credit first and borrowing second.

With this type of loan, you’re approved to borrow a certain amount of money. But instead of giving you the cash, the lender puts that money into an interest-bearing savings account for you. You repay the loan over time, with interest. When it’s paid, you get your money back with interest.

A credit bureau is a company that collects and maintains individual credit information and sells it to lenders, creditors, and consumers in the form of a credit report. While there are dozens of credit bureaus across the U.S., most consumers are familiar with the big three: Equifax, Experian, and TransUnion.

Bankruptcy is a legal process designed to help individuals and companies get a financial fresh start by discarding or making arrangements to repay unmanageable debt. It can also be a way for companies to end business and liquidate assets in an orderly way.

Your credit report contains a wealth of information about your financial history and actions. If you have credit or loan accounts, those accounts and how you pay them are included in your credit report. It’s important to review your credit report at least once a year so you know what your creditors are saying about you.

Your credit utilization ratio compares your credit card balances to your credit limits. In other words, it's how much you're currently borrowing compared to how much you could borrow.

Secured credit cards require a deposit that serves as collateral for purchases you make using the card. If you default on your payments, the card issuer keeps your deposit. Otherwise, as long as you keep your account in good standing, your credit card issuer will return your deposit to you after a certain number of months or when you close your account.

A free credit report is a credit report you can access without paying a fee. Services like Credit Karma require you to create an account to view your credit reports from credit bureaus TransUnion and Equifax, but they don’t charge a fee.