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How To Fix A Bad Credit Score

Updated on August 21, 2015

If you need to fix a bad credit score, you first need to understand what your score is and how it's made up, then these simple steps will enable you to safely and systematically go about fixing it.

Your credit score (credit report score) is vital!

Your payment history is responsible for 35% of your credit score. If you miss just one payment, it can take as much as 50 to 100 points off your score! Plus, one late payment can affect the interest rates of all your other credit accounts. Lenders credit check your credit report as often as every month to see if they can legally raise your rate, and the late payment and a poor credit score is just what they want to see.

If you are 30 to 60 days late, and you don't make a habit of it, you can catch up on the payments without it affecting your report for the long term.

If you are 90 days late, your credit score will be affected for 7 years.

If you are 120 days late, your debt is normally sent to a collection agency, which shows up on your credit report and will lower your credit score even more.

Copyright Steve Woods, Colchester, England
Copyright Steve Woods, Colchester, England

The Law and Your Rights

The Fair Credit Reporting Act is a Federal law that gives consumers the right to have inaccurate information removed from their credit reports. If you see errors in your credit report, you can dispute them with all three of the major credit reporting bureaus and the lender as well. When errors are removed, your credit score will go back up. These errors are not always your fault. People transpose numbers and make mistakes, and someone else's information winds up on your credit report. You might be a victim of identity theft and not realize it until you see your credit report.

To begin the process of getting these errors off of your report, dispute them in writing – not online and not by telephone. List your full name and address, a full description of the credit errors that you are disputing, the reason why you think that it is an error, and a nicely-worded request asking that the errors be corrected or deleted.

Send copies of your credit report with all of the items in question highlighted, and copies of anything you may have that will back up your claim, such as canceled checks or credit statements. Use Certified mail and get a return receipt so you have a record of when the letter was received. Contact the creditors related to the errors, and mail them the same information.

If the information is indeed an error, it must be removed from your credit record. And, if the information cannot be verified as an error, it must be deleted from your credit record.

Identity Theft

Identity theft is another reason why you might see items in error on your credit report.

If you feel you are a victim of identity theft, contact one of the 3 major credit reporting bureaus to report this information. They will contact the other 2 for you. Your file will be flagged with a fraud alert, and any creditors must call you before they allow any credit to be used. This fraud alert lasts for 90 days. Once the 3 credit bureaus send you a copy of your rights, contact each of them for an extension of the alert for a 7 year period. You will need an identity theft police report for this extension. Also, get a free copy of your credit report so you can see what is being done. Once notified, the 3 bureaus have to block the erroneous information from your credit report.

It can take several months to get everything done in an identity theft case. You can help things along by contacting Consumer's Union and requesting a security freeze so no one can open any new credit accounts in your name.


  1. The FCRA states that you have the right to have erroneous information removed from your credit report.
  2. Contact the credit reporting bureaus and your creditors in writing. Send evidence of the errors, plus a copy of your credit report by Certified mail.
  3. If you are a victim of identity theft, contact the credit reporting bureau and have a fraud alert placed on your credit report.
  4. Contact Consumer's Union to have a security freeze added to your credit report.

copyright Steve Woods, Colchester, Essex, UK
copyright Steve Woods, Colchester, Essex, UK

Manage Your Outstanding Debt

You know that your debt is affecting your credit when you can only manage to pay the minimum amount due on each of your credit cards. Or, when you've missed a few payments because you had more month than you did money! If you want to better manage your debt, you must first collect all the information about your debts so you can figure up how much you owe. Once you have that figure, examine your monthly budget. If the amount you have left after your mortgage or rent payment, utilities, insurance, groceries, and any other monthly expenses is not enough to pay your debts, you must look for ways to cut down on your spending so that you will have more to put towards your debts. Paying only the minimum amount due will never get those debts paid off, as most of your payment goes on the interest. Only a few dollars actually goes on the principal.

Next, contact your creditors. See if you can get a lower interest rate, which would lower your monthly payment. Perhaps you can get a reduced settlement amount if you agree to pay the bill in full. You never know until you ask. You can also ask your creditors to remove any late fees so you avoid bad credit and a poor credit score.

If you would rather have someone else do this for you, debt consolidation might be a good idea. A debt counselor will contact all your creditors and negotiate a lower payment/interest rate, and can also get late fees removed. Debt counselors also help you save money. You pay them one lower amount each month because of the lower interest rates, and they pay your creditors for you – the ones with the highest interest rates first. Debt consolidation charges are about 10 percent of your monthly payment. In reality, they do nothing for you that you cannot do for yourself. Some people enjoy the convenience, but you do have to pay for it.


  1. Figure up how much in debt you are.
  2. Check out your monthly budget.
  3. If the amount left after your monthly expenses is not enough to pay more than the minimum payment due, you must work out a way to spend less.
  4. Contact your creditors and try to have any late fees removed, interest rates lowered, or a reduced settlement payment amount.
  5. Consider debt consolidation if it would be easier for you, but be aware that it is not free.

Rebuilding your credit score with New Credit

You can start to rebuild your credit even while you are working towards repairing your credit score by getting yourself a secured credit card. You put a sum of money in a bank, and are issued a credit card that lets you charge up to that amount, minus any fees. Then, you make sure to always make your payment on time so that you can have a history of timely payments. Charge only small amounts that you can pay off in full each month.

If your credit was not too bad before you started to work on it, you might decide to get yourself a regular credit card. Beware! The interest rate on this card would be so high because your credit is not perfect that it will negate any good having new credit would do to improve your credit rating. A secured credit card will work much better for you.

One thing to watch for on any type of credit card you may get to improve your credit rating are the different fees that are charged.

  • APR – Annual Percentage Rate, paid on outstanding balances, balance transfers, cash advances
  • Annual fees – a fixed fee that you pay simply for having this particular credit card.
  • Balance Transfer fees – an amount charged to transfer the balance from a high interest credit card to a card with lower interest rates.
  • Cash Advance fees – 2 to 4 percent of the amount of money advanced from your credit card.
  • Late Payment fees – amount charged by credit card companies when your payment is late – even if it is just one day! Usually $30 or more each month, depending on credit card company.
  • Over Credit Limit fees - fee charged when you go over your credit card limit. Normally, $30 or more for each occurrence.

copyright John Gardiner, Merrivale, KZN, South Africa
copyright John Gardiner, Merrivale, KZN, South Africa

Be careful not to go overboard and try to get too many new credit cards in your zeal to improve your credit. The more cards, the more potential for new debt. Lenders do not like to see too many credit cards, for it signifies to them you can rack up a lot of debt very quickly.

Make a new rule to keep your balances on your credit cards as low as possible, preferably paying them in full each month when at all possible. This looks much better on your credit record, and will help build your credit score up as well. And always pay your new cards on time so as not to get your credit off track again!


  1. A secured credit card works best for rebuilding your credit while also working to improve your credit score.
  2. A regular credit card will work, too, but be aware that your interest rates will be quite high.
  3. Be aware of the different types of credit card fees so they don't take you by surprise.
  4. Don't get too many credit cards at once. Ideally, only have as many as you can pay in full each month.
  5. Keep a low balance, and always pay your new cards on time.

Keep an Eye on Your Credit Score

While working to rebuild your credit, do take advantage of the free credit reports you are allowed to get each year from the 3 major credit reporting agencies. This will help you to stay on top of your progress.

A credit monitoring service will also help you to watch over your credit by keeping track of all 3 credit reporting bureaus. You are alerted each time a creditor wants to check your credit, or any other important changes to your credit record. You generally get as many free credit reports and credit scores as you need as well as other perks such as identity theft insurance, depending on what service you choose.


  1. Take advantage of free credit reports.
  2. Consider joining a credit monitoring service so you can be alerted each time there is activity on your credit report/credit score.
  3. There IS HOPE and you CAN fix a bad credit score.

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    • Julie-Ann Amos profile imageAUTHOR

      Julie-Ann Amos 

      9 years ago from Gloucestershire, UK

      You're welcome!

    • Joel McDonald profile image

      Joel McDonald 

      9 years ago from Denver, Colorado

      Great Post Julie-Ann,

      These days, protecting our credit score is paramount. Thanks for sharing.


    • Julie-Ann Amos profile imageAUTHOR

      Julie-Ann Amos 

      9 years ago from Gloucestershire, UK

      Why thank you waynet! I had a nightmare last year when my brother (married rather confusingly to a Julie Amos) got his and my credit scores linked... so debts for 4 people (2 couples) and associated mortgages etc all on MY score... took a while to get sorted!

    • waynet profile image

      Wayne Tully 

      9 years ago from Hull City United Kingdom

      This hub has some very detailed information.

      I am currently in a property that has bad debt associated with it and rather than researching the info, you have provided this here to start my quest to get this stuff removed somehow!


    • profile image

      Steven Ahmad 

      10 years ago from NYC

      This is a great hub


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