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How to Rebuild Your Credit Before You Turn 30

A survey from Credit Karma found that more than two-thirds of Americans experience at least one significant “credit fumble” that resulted in a lowered score before they reached their 30th birthday.

Nearly three-fourths of respondents stated that better/more financial education could have prevented mistakes they made in their younger years that affected their credit.

Few participants said they received some sort of financial education before they went to college, and more than half that did said they received it from their parents.

Learning about how to maintain a good credit score and why it is crucial is important.

About 75% of the survey’s respondents said financial mistakes lowered their quality of lifelater on.

Why It Matters

Your credit score is important because many lenders will take it into account when deciding whether to grant you a loan and how high the interest rate should be. Landlords may also use it when looking for potential tenants.

According to, most lenders categorize scores into several brackets:

Excellent Credit – above 750
Good Credit – 700-749
Fair Credit – 650-699
Poor Credit – 600-649
Bad Credit – below 600

If your score is in one of the bottom three brackets, there is some room for improvement.

If your score is poor or bad, you may experience difficulty finding a loan or a credit card.

Preventing Mistakes

Bad marks can stay on your report for up to seven years, and in some cases, up to a decade. Bringing your score back up is difficult. Conversely, bringing your score down can be as easy as missing an important payment.

According to Credit Karma’s survey, some of the most common score-diminishing blunders include:

  • Missing payments
  • Overspending on credit cards
  • Defaulting on a loan
  • Getting an account sent to collections

If you have made a mistake or two in the past and are now trying to raise your score, the best thing you can do is address the problem that resulted in a lowered score in the first place.

Make sure to keep your credit card spending under control and create a system to avoid a missed payment. This can include setting up automatic payments or creating alarms that go off a day or two before a bill is due.

The All-Important Credit Equation

Your credit score is composed of 5 factors.

Knowing these and how much each impacts the score is important when you are trying to improve or maintain a credit score.

According to myFICO, the five components that are added to the equation are:

  • Payment history – 35%
  • Amounts owed – 30%
  • Length of credit history – 15%
  • New credit – 10%
  • Credit mix – 10%

When considering this breakdown, it’s clear that the most important thing you can do to improve your score is consistently make payments on time. If you have missed payments in the past, they could affect your score for up to 7 years.

But by beginning now, you are paving the way for a higher score and more opportunities down the road.

The second most important component is the amount of money you owe. This means that paying down debt is crucial. When that bill comes in, it’s good to make sure it gets paid on time. But it’s also important that it gets paid in full, or at least as much as you can afford above the minimum payment.

Tweet: “Missed payments in the past, they could affect your score for up to 7 years.”

Only contributing the minimum payment each month will keep the amount of debt you have high, and it’ll take longer to pay it all down. Plus, if the loan has a high interest rate, it’ll increase the amount of money you’ll put toward the debt over time.

Once you have taken hold of your bad financial habits and have come up with strategies to keep your score from another decrease, the only thing you can do is wait. If you’re making payments on time, it’ll take time for the mistakes you’ve made to be dropped from the report.

The bright side of waiting for that moment is that the length of your credit history makes up 15% of your score. In time, you’ll notice your score going up and your opportunities for loans getting better.