Maintaining a healthy credit score is important. It’s essentially a measure of your responsibility — how accountable and trustworthy you are — for creditors who want to know if they should lend you money when you need it. Credit scores are sensitive, and a bit unforgiving. They are quick to lower when negative information such as late payments, accounts in collections, foreclosures, bankruptcy, and tax liens appear on your credit report, but can take years to repair.

The good news is that you can do it on your own. Here are four steps you can take to repair your credit score.

1. Check Your Credit History

First, check your credit report to identify any negative information. You are entitled to one free credit report from each of the three major credit reporting bureaus (Experian, Equifax, and TransUnion) every year. You can download all three at

Once you get all three reports, look through each one to find and record any errors. Be sure to check each report, because some errors may only appear on one or two reports. Then you will need to contact each bureau where the error is reflected to correct it. Take note of all accurate negative information, so you can avoid it in the future.

Each report has four sections: Credit Summary, Accounts, Inquiries, and Negative Information. Reviewing each section can help you understand the source of a poor credit score, and it can help you identify errors in your report.

2. Resolve Incorrect Information on Your Report

There are millions of errors on credit reports, research has shown. It’s important to keep your eyes peeled for any incorrect information on your report, such as accounts you don’t recognize, incorrect addresses or even a misspelled name. If all the information — even those negative marks — is correct, then skip ahead to #3.

Incorrect information appears on your report for four primary reasons:

  • Someone stole your identity and opened new accounts in your name.
  • Someone stole one of your existing accounts, and started using it.
  • The bank made an error and reported a delinquency or default that never happened.
  • A collection agency made an error and reported a collection item on debt that was never yours.

Disputing incorrect information involves three steps:

  • Dispute the item online with each credit reporting agency.
  • Write a letter to each credit reporting agency, and keep copies of your correspondence.
  • Write a letter to each organization (bank, collection agency, credit union, etc.) that submitted incorrect information, and keep copies of those letters.

Once you register your dispute with the credit reporting agencies, they must investigate the item in question within 30 days, and forward all the relevant data you provide about the inaccuracy to the organization that provided the information. If the information provider finds the disputed information is inaccurate, it must notify all three nationwide credit reporting companies so they can correct the information in your file. If your dispute isn't resolved, follow the advice found here. MagnifyMoney has written about the dispute process.

The best way to improve your score is to have good behavior reported every month. Picture it as burying negative information under a mountain of positive credit information.

3. Bury the Bad with the Good

The best way to improve your score is to have good behavior reported every month. Picture it as burying negative information under a mountain of positive credit information.

Keep existing accounts current. Continue to pay whatever account has the most positive information. Use less than 10% of your total available credit limit and pay your balance in full and on time each month.

Keep accounts out of collections. You may have missed a few payments on a credit card, but there is still time to stop the damage before it gets worse. Work to pay back late payments before the item goes into collections. Once these accounts are current, they will start to work positively toward your score.

Work on paying down your debt aggressively. If you’re constantly maxing out your credit cards, your score will likely never improve. Use a strategy like the debt snowball or avalanche to whittle away your debt over time.

If you are rebuilding your credit, consider taking out a secured credit card to add positive information into your report.

4. Monitor Your Score

You should monitor your score to stay on top of it. You can do this for free with a service like Credit Karma, which gives you access to two out of three credit reports. Alternatively, you can pay a fee for services that provide daily three-bureau credit monitoring, resolution assistance if your identity is stolen, and insurance if you have to engage in a legal battle.

Going forward, take care to avoid taking on more debt than you can handle, and implement a strategy to pay down your debt quickly. When you make positive changes, your credit score will improve. Within a few years, you’re likely to have good credit again.

MagnifyMoney is a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.