The Ultimate Credit Score Clean Up

Coming out of undergrad, my credit score was terrible. It all started my sophomore year of undergrad when I decided to take advantage of the automatic approval for credit cards from Victoria’s Secret and Old Navy during Christmas season. I didn’t have much knowledge when it came to understanding interest rates, late fees and the 30% credit card utilization. Not being able to make the monthly payments after maxing out both of my credit cards led to a serious increase of late fees on top of the already high interest rates. By the time I graduated college, my credit score was a little over 400 and I needed my dad to cosign for just about everything that had to do with credit (car, apartment, extra student loans).

As I got older, I knew that I had to start working on rebuilding my credit. Like many people, one day I’m going to want my dream car and home, I may want a boat or I may need a loan for one of my many businesses. Per the usual, I started researching how to repair my credit and where to start. Working retail for a little bit of money and having to pay bills made it impossible to start right after graduating college. I wasn’t actually able to start repairing my credit until 2019, when I started grad school. Once I saw how big of a refund check I would be getting each semester, I buckled down and started planning out how I was going to make the checks work in my favor. Being 24 at the time, I knew I was still young, but also the perfect age to start working on my future financially.

I know that not everyone is in the same position as me. Not everyone goes to college so of course, the journey towards repairing your credit will be different. However, in general, I created the perfect plan to be able to repair bad credit. I’m still learning how to build, but I’ve got the repair aspect under control. Here’s my perfect plan to repairing your credit:

1. Sign up for a Credit Karma account. Credit Karma is a free website and app that gives you in-depth details about your credit score: open accounts, closed accounts, credit cards, loans, etc. They send you weekly updates of your credit score and they even tell you what changed to make your score what it currently is.

2. Focus on your lowest balances first. If you have a ton of accounts with balances that you haven’t yet paid down, focus on paying off the lowest balances. I know that some people like to pay on their big accounts down monthly, but that can take forever and the results of having a higher score won’t happen as quickly. Instead, pay off those low balances first so that you can get them out of the way and you’ll see your score increase much faster.

Petra Braun Illustration

3. Check those closed accounts. One of the biggest mistakes that people make is thinking that closed accounts don’t matter. Companies will close collection accounts if you’re not making payments so while you won’t see them as active, they still have an effect on your credit and yes, they can decide to start garnishing your paychecks at any time. To avoid garnishment and to increase your score by about 20 points each, pay off the balances of the closed accounts.

4. Take the settlement offers if they’re in your best interest. Many companies will offer a lower settlement amount if you can pay it in full rather than trying to save to pay for the total amount. You may gain a lesser amount of points, but if that’s what works best for you then go for it. For example, you may have maxed out a $500 credit card years ago and the account was closed due to non-payment. They may offer a settlement amount for $300 instead if you can pay it in full at that moment. By taking the settlement offer, your score may increase by 15 points instead of 20. My advice would be to take the offer if that’s all you can afford. A 5 point difference isn’t much and you can make it up later by building your credit after you repair it.

5. Write goodwill letters to closed accounts once you pay the balance in full. Even when you pay off a closed account, it still remains listed on your credit and while it may only have a small effect of about 2-3 points, those are still points that you can get back by having them fully removed. You have the option to write a goodwill letter to closed accounts requesting that they remove the account completely, for a good reason. For example. you could inform the company that you were going through a difficult time financially and now that you’ve paid off the balance, you’re looking to get a home loan and need the closed account removed to have a better chance of getting approved. I’ve personally written about 5 of these goodwill letters and so far, I’ve been getting responses in the mail about my requests being accepted. I should be seeing these closed accounts being completely removed in the next few weeks.

In March of 2020, my credit score was 480. Now here I am in September of 2020 with a current score of 660. I raised my score by 180 points in just 6 months. My goal was 650 in 6 months and I went above and beyond. My next goal is a credit score of 700 by the end of this year. What am I working towards? Getting a finance approval for a tiny home on my own property. When you create a goal in your mind, it gives you the motivation to continue your journey. In a future post I’ll be talking about how to build credit after the repair process; that’s the exciting part. If you have any questions about the tips above, feel free to reach out.

2 thoughts on “The Ultimate Credit Score Clean Up

  1. 1. Sign up for a Credit Karma account. Credit Karma is a free website and app that gives you in-depth details about your credit score: open accounts, closed accounts, credit cards, loans, etc.

    I wonder something? Did you ever discover the information on accounts that Credit Karma doesn’t show people? In the case of a Collection account this is critical, need to know information.


    1. I’ve never had that issue. They show me every account I’ve ever had and how it’s affecting my credit. I’ve had several collection accounts from when I was younger and they’ve never not shown me one. I think some people do miss the accounts because they don’t know where to find them.


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