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FICO Scores - Manage Your Credit Before It Needs Repair

Colin GrubbMar 17, 2017

A third of all Americans have a credit score below 601. Most believe the only way to improve this score is to throw as much money as possible at the problem. This is not always the case. Although aggressively paying down balances surely helps, you must know which balances to prioritize, and which are the exact ones dragging down your score. But let’s face it; if you have a subterranean credit score you most likely don’t have the extra cash lying around anyway.

Far and away the best thing you can do to help your score is to learn how credit works. Although it can seem a complicated and secret formula, the method by which your score is determined is freely available information. If you take the time to educate yourself in this process, you will find there are several concrete things you can do right now to begin improving your credit health, even without extra money.

First, get your score

There are three credit bureaus: Transunion, Equifax, and Experian. Each has its own method for compiling your credit report. FICO (Fair, Isaac and Company) is a separate entity entirely. FICO looks at each report, and uses the same formula to issue a score based on the information in the report. Therefore, you have 3 official FICO scores, one for each agency. The reason why the score can be different across bureaus is because each bureau collects different information.

Generally speaking, you have no way of knowing which of these three scores a lender is going to pull, so it behooves you to know all three. Getting your official FICO score isn’t the easiest thing in the world, though. One method is to pay FICO itself at Also, the three credit cards below give you your official FICO score if you apply.

Discover – TransUnion FICO Score 8
Citibank – Equifax FICO Bankcard Score 8
Chase Slate – Experian FICO Score 8

There are also a few other ways.

What About All the Other Free Credit Scores?

It is important to get your official FICO scores because 90% of all lenders are going to be using them to make a credit decision.

The multitude of other websites that offer you free scores, including the bureaus’ websites themselves, are giving you something called a VantageScore. This is an entirely different, newer formula for calculating a credit score. Your VantageScore can be close to your FICO score, but it also can be way off. If you’ve ever pulled this score, and then tried to negotiate with a lender who has a completely different one, you’ll understand this.

Now that you have your official FICO score, let’s first take a look at the various reasons it may be low and what you can do about it on your end. Then we’ll explore what a credit repair agency can do for you as well.

No Credit History

If you are a student, or have no previous credit history to speak of, it’s going to be difficult to get approved for a credit card. The only way to establish good credit is to display responsible and on-time bill paying and good credit habits. So how can you do that if you can’t get a credit card?

If you are a student, you might be able to get approved for a student credit card. Failing this, some student credit cards offer the option of having an adult (parent, guardian, sibling) to cosign. Having someone else with good credit willing to take the risk of cosigning your card greatly improve the chances you will be approved.

If you are no longer a student, you can always apply for a secured card. A secured card is a way of proving to the credit card company you are able to reliably handle credit. With secured cards, you pre-pay the balance up front, so there is little risk to the issuer. Then, if you faithfully demonstrate good credit management and pay on time, you may qualify later for an unsecured card and will be able to start building your credit history.

Late or Missed Payments

The one thing you can do that will reliably mess up your credit every time is to pay late or, worse, not pay at all. Influencing 35% of your credit score, it is the most significant factor on your report. When you pay late you are not only charged a fee, your interest rate could increase, and the company can report the late payment to one of the bureaus if it’s more than 30 days.

Clearly the no-brainer here is to pay on time, even if it is the minimum. But if you do not have the money it’s best to call the credit card company and honestly explain what is happening. They likely will have other options available to you, like a partial payment or a pay date adjustment. A late fee is bad, but what you’re really trying to do here more than anything else is find out what steps you need to take so they won’t report to the credit bureau. A late fee is once; a missed payment can stay on your report for years.

Credit Utilization

A lot of people logically think that having a lot of debt will negatively impact their credit score. This is not necessarily true -- you can have loads of debt and still have a great score. It’s how that debt is structured, how you are carrying the debt that makes the difference.

Long story short, FICO doesn’t like to see that you are using a high percentage of your total available credit, or a large percentage of the credit of each individual card. Ideally, both should be in the neighborhood of 30%.

This is where you have the most amount of direct control over your score. Here are some concrete things you can do right now:

  • If you have more than the minimum amount any given month, put the extra money toward the higher balance cards and pay the minimum on the lower ones.
  • If you are using a large percentage of your total available credit, you might want to try to apply for more cards so you can increase your overall access to credit. However, this is only if you know you can resist the temptation to use them. They are only there to increase your line and your FICO score.
  • Similarly, if you are carrying high balances on individual cards, and you get approved for a lower or 0% APR card, resist the temptation to clear all cards by transferring entire balances over to the new, lower interest one. The more you are able to bring the utilization ratio by card toward 30%, the more profound an impact it will have on your score.

Having Only One Kind of Debt

Though this has relatively less influence, it still makes a difference. Credit bureaus actually like to see a healthy variety of revolving and installment accounts in your credit report. They call this credit mix and it includes everything on which you are currently making payments: credit cards, mortgage, auto loans, etc. This is part of the reason you shouldn’t close old accounts you are no longer using. That, and it decreases the overall credit to your name.

Negative Marks on Your Credit Report

This is where things can get labor intensive. There are two types of negative marks on your report: genuine errors and legitimate negative marks. It is easier to take care of genuine errors on your own. A credit repair company may have better look negotiating with the issuer to remove or downplay the things that actually are true.

You are entitled to one free copy of your credit report (sans FICO score) from each bureau every 12 months. If you want to do this on your own you’ll need a copy. Go through the report and scrutinize any negative marks. Typical errors include:

  • Wrong information because of confused names, addresses or SS#s
  • Your identity was stolen and there are negative marks because of that
  • Accounts you closed are showing up as closed by the creditor
  • Info from ex spouse still mixed in with yours
  • Collection agencies you paid who forgot to report your payment

You will need to furnish documents to each bureau as proof. This is also typically done by snail mail and can take some time.

You can also ask creditors and bureaus to “verify” items. This is kind of a legal loophole. One example of this working well would be if a given creditor has since gone out of business. Even if a negative mark were true they’d have to remove it because it cannot be verified in that situation.


This is where industry-specific knowledge and experience really come into play. Legitimate late and missed payments and other negative remarks are verifiable and cannot be challenged. But there are certain tricks of the trade that credit repair agencies can employ, and loopholes they can exploit, to nudge these marks off your report.

These tactics don’t always work, but credit repair agencies, particularly actual law firms like our advertising partner Lexington Law, do nothing else but communicate with creditors and the three bureaus all day long and they’ve been doing it for years. Some credit repair companies have long-standing relationships and solid lines of communication with the entities making decisions about your credit, and can negotiate on your behalf far more effectively than you can over the phone.

Some examples of appeals that could be made on your behalf include if you’ve been ill, are on active military assignment, have gone through a divorce settlement, are a student, and if you’ve faithfully made timely payments since on the account, etc.

Hopefully you now have a better understanding of how credit works, how your FICO score is determined, and what you can do on your end to start getting that score out of the basement! If, after reading this you feel you’d benefit from a credit repair service, take a look at our top ten credit repair companies for the year.