Few things are worse than finding out that you have a bad credit score. Many people know that they have this hanging over their head, where others are taken completely by surprise when they go to take a loan or just do a check.
If you have a bad credit score, then don't wait to start fixing it. Every step you take can count and help improve your score, and the faster you get started, the faster you can see your score move in the right direction.
Check your credit report for accuracy.
The first thing you should do is check your credit report to make sure that everything is accurate. A bad score can come about with inaccurate information or if you've been the victim of identity theft and there are items that you don't even know are there.
Work through any late payments.
If you're late on any payments, you need to get this taken care of in order to gain any sort of traction at all.
Reduce your available debt.
If you have a lot of credit lines open, you can often improve your score by selectively closing credit cards or calling credit companies and asking for a lower credit limit. Less available credit is often seen as less risk of default, which can improve your score.
Reduce the number of open balances.
If you are carrying a lot of different credit cards with balances, you want to start reducing this number as fast as possible. If you owe $5,000, it's more favorable to have two cards splitting that balance than it is to have six or seven. You can start by paying off cards that have the lowest balances. You may also look for an existing card that will offer a good rate on balance transfers and bring some or all of your credit balances together into one spot.
Pay off your loans faster.
If you're only making the minimum payments, you need to start bumping this number up. Sell some stuff. Take on a side gig. Make lifestyle changes. Whatever it takes, you want to start lowering your balances, which will improve your score.
Stop applying for credit.
Newer lines of credit are seen as riskier than older ones. Every ‘new' credit card you take can potentially damage your score. As a general rule, don't apply for any additional credit.
If you pay off $500 on your balances but then add $400 in the month, you're not going to get very far at all. Make your purchases for what you need today via cash, check or a debit card. This way, any activity on your cards is only serving to lower it. Knowing that goes a long way.
The bottom line is that bad credit scores are awful, but they don't last forever. You may not be able to change it overnight. However, you can certainly do so with an organized and disciplined approach.
Readers, have you ever actively taken measures to improve your credit score? How did it go?