Tips and tricks to repair your personal credit

Personal credit scores help determine whether a person gets a home, a car, and even a job. Maintaining your personal credit score also means having access to credit in cases of an emergency, like an unexpected major home repair, or needing to replace a vehicle.

Paying bills on time is essential to maintaining good credit, as any late payments mean a lowered score. But for many, past mistakes—including paying late—mean a lower credit score, which can lead to higher interest rates or even the denial of credit. It will take some time and effort to repair your personal credit if it is in need of rehabilitation, but it will save you money and increase your opportunities over time.

You can improve your credit score by following these suggestions from credit experts.

Decrease your use of credit

Even if you pay your credit card bill on time, using too much credit will lower your credit score. Karen Ford, Master Financial Coach at KBF Management Company, suggests paying down credit card balances in order to lower your credit utilization.

"If you have a credit card with a limit of $2000, and you have $1000 charged on it, you are utilizing 50% of the credit available to you," Ford says. "The lower your credit utilization, the better off you are on your credit score. The higher the credit utilization, the lower your score," she adds.

If you do not have the means to lower your credit utilization by paying down the balance, another option is increasing your credit limit.

Austen Weyenberg, founder of The Logic of Money, says that increasing your credit limit will give you an immediate boost to your credit score, but warns that repairing your credit is a long-term process. "Manipulating your credit usage is like slapping a band-aid on your credit score. It's a quick fix, but it won't work in the long run. Repairing your credit requires you to build good financial habits and discipline with your spending," Weyenberg says.

Remove late payments

Late payments on your credit report, even just a few days late, can cause your score to drop by 60 to 110 points, according to William Taylor, Career Development Manager at VelvetJobs.

According to Taylor, "Removing a late payment will take persistence. You call the original creditor and ask for a goodwill adjustment. If they resist, you can even negotiate the removal of the late payment by agreeing to sign up for automatic payments."

Don't apply for more credit

No matter how attractive the offers, resist the urge to apply for too many credit offers, as each hard inquiry, or request for your credit score, will lower it further.

Similarly, retail store cards, which are not useful in building credit, require a hard inquiry of your credit score. According to Ford, "Every time you apply for credit, whether you get approved or not, your credit score will take a hit."

Dispute credit report errors

While some credit score-lowering items are your mistakes, other errors can be made. Brian Davis, director of education at SparkRental, suggests disputing any errors you find on your credit report.

"The first step is to pull your credit report, (which you can do for free at AnnualCreditReport.com, the official site sanctioned by the US government), review it for errors, and dispute them (which is also free and easy to do)," Davis says.

Remove zombie debt from your credit report

A negative item on your credit report might be zombie debt. What is zombie debt? A peculiar situation in which debt that is very old has fallen off your credit report, only to come back from the dead, hence the name. While some zombie debt may be legitimate, fraudulent debt or even mistaken debt may appear this way.

Sally French, a personal finance writer for Wirecutter, recommends caution. French says, "While with standard credit card debt, I generally recommend paying as much as possible, as soon as possible, to reduce how much you owe in interest, you need to take a step back and assess a lot of factors before racing to pay off zombie debt. Zombie debt can be money you don't owe because of fraudulent charges. "

In order to avoid having to investigate zombie debt, French suggests a proactive approach. "Getting your report each year can help you spot errors, whether it's a fraudulent account from identity theft or just a human error. It'll be easier to dispute any potential zombie debt if you're always aware of your credit report and know what you actually owe."

Having good credit may take some time and work, but credit repair is worth the effort. In the long run, good credit means saving money, time, and peace of mind.