bad Credit

8 ways to fix a ‘bad’ credit score

8 ways to fix a 'bad' credit score
Written by Publishing Team

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Fixing your balance takes time and effort, but it’s worth it.


In 2020, American consumers had an average of $5,315 in credit card debt and were using 25% of their available credit. Although last year’s numbers were generally lower than in 2019 – likely due to disruptions from the COVID-19 pandemic and lockdowns across the country – individuals with very poor credit were found to have the highest credit utilization rate. (Your credit utilization rate is the amount you currently owe divided by your credit limit.)

Translation: Those with low credit scores bear the bulk of credit card debt in the United States.

A low credit score can prevent you from getting the best rates on loans and credit cards, causing you to pay higher interest rates or be ineligible for credit offers. You may also find it difficult to get approval to rent an apartment or get utilities. In some cases, a credit score that is below average can also affect your job prospects. But if your credit score is lower than you’d like, it is possible to rebuild your credit and improve your score. We will explain how.

How is your credit score calculated

Before you can fix your credit, it’s important that you understand how your credit score is calculated. data from your credit report, which contains information about any credit accounts such as credit cards, auto loans, student loans, and more, that are used to calculate your credit score. This data is reported to the three major consumer credit bureaus: Equifax, Experian and TransUnion. (You might have three different credit scores with each, because not all lenders and creditors report to all bureaus, and they don’t always report at the same time each month. The scores are usually similar, though.)

For the purpose of this article, we will be referring to your FICO score – one of the most popular credit scores – which falls into five categories:

  • 35% Payment Date: Your past pattern of payments (on time or late) and amount paid (minimum due, full balance or other amount) can raise or lower your credit score.
  • 30% Amount Due: The balance you carry in all accounts compared to the amount of credit available to you constitutes your credit utilization rate. Your credit score will improve as this rate goes down.
  • 15% of credit history: The longer you have a credit account, the higher your credit score.
  • 10% new credit: When you apply for new credit, the card provider will likely withdraw your credit (also known as hard query), which can cause your score to temporarily drop by a few points. However, if a new card is approved, your score will likely go up, offsetting this temporary drop.
  • 10% credit mix: This is the range of credit you have (student loans, credit cards, student loans, etc.). When you apply for a new type of credit account, it can increase your score.

Your credit score is constantly updated as your credit profile changes. FICO scores range between 300 and 850. Credit scores between 300 and 499 are considered “extremely poor” and those between 500 and 600 are considered “poor.”

8 steps to determine your credit score

1. Check your credit report and score

If you want to boost your low credit score, the first step is to look at your credit report and review it for accuracy. Throughout the pandemic, you can access free online weekly credit reports from the three offices by going to You can also get up to six free credit reports through 2026 from Equifax.

It is important to get your credit report from all three credit reporting agencies. Checking your credit score is a weak blow to your credit and will not affect your score.

2. Objection to any errors

If you find an error in any of your credit reports, dispute the error immediately. You may need to provide documentation indicating incorrect information (eg confirmation that you paid your bills on time if they are reported late).

The credit bureau has 30 days to complete its investigation. If the reporting agency requests more information during that window, it is allowed an additional 15 days to obtain a resolution as defined by the Fair Credit Reporting Act.

Depending on what’s wrong, the solution can quickly improve your credit score. However, there is still more work to be done to boost your score.

3. Controlling the payment of bills

The biggest impact on your credit score is your payment history, which accounts for 35% of your score. If you want to improve your credit score, paying your bills on time will help you. One way to stay informed of payment due dates is to set up automatic payments to your existing accounts. This way, you won’t have to remember to make a payment every month, and you’ll always be on time.

While we always recommend paying your balance in full, if you can’t afford it, paying the minimum amount owed can help you avoid late fees and even higher interest fees. Paying the minimum will slowly reduce your balance, which will improve your score over time.

4. Set a goal with a credit utilization rate of less than 30%

Your credit utilization ratio is calculated by dividing your total outstanding debt by your total available credit. So, if you have a total credit of $3,000 and you have a credit card and a syndicated loan balance of $800, your credit utilization rate would be 26.67% ($800 divided by $3,000). In general, the higher your usage, the lower your credit score. While your payment history is the most important factor in calculating your FICO credit score, your credit utilization ratio is the second most important factor.

If your credit utilization ratio is 30% or higher, set a goal to make it less than 30%, with 10% or less being the ultimate goal. Paying off your outstanding balances quickly and avoiding taking on more credit card debt can help you reach your goal faster. You can also request that your credit limit be raised, although this tactic may not work if you still use your credit card for purchases.

If you have a large amount of outstanding credit card debt, you may be able to consolidate the debt to make payments easier and pay them off faster. A debt consolidation loan or credit counseling program can help you reach your credit utilization ratio goal.

5. Limit new credit inquiries

Any time you apply for credit or request a credit limit increase, an inquiry is made regarding your credit. There are two types of queries – a simple query and a difficult query.

Soft inquiry does not affect your credit score and occurs when:

  • You have to check your credit
  • You give permission to your employer to check your balance
  • Credit card companies check to see if you’re pre-approved with offers
  • The financial institutions you deal with check your balance

A tricky inquiry occurs when applying for new credit, and it can hurt your credit score. While one difficult investigation may only have a temporary effect, multiple inquiries in a short time frame can damage your credit score and make lenders reluctant to work with you.

6. Avoid closing old credit cards

If you’ve paid off the credit card and don’t plan to use it, you might think closing the account is the right move. In fact, closing old credit cards can lower your credit score even further. The length of your credit history accounts for 15% of your credit score, and the higher your credit history, the better.

Instead, chop up old cards so you’re not tempted to use them again. You have no control over whether the card issuer closes the card, and after a certain inactive period, the issuer may close the account. If your credit card has an annual fee, it may be a good idea to close the account if you don’t plan to use it again.

7. Consider a balance transfer card

If you’re swimming in credit card interest, one possible solution is to move your balances to low or no interest Balance Transfer Credit Card. Balance transfer credit cards typically offer an introductory annual interest rate of 0% for 12 to 24 months. This allows you to combine high-interest credit card debt into one card, combining your payments and providing you with interest. Before applying for a balance transfer card, make sure you can pay off your debt during the introductory period – otherwise you may find yourself where you started.

8. Apply for a secured credit card

Rebuilding your credit can take some time, but you can improve a bad credit score with a secured credit card. A secured credit card works just like a regular credit card, but your credit limit depends on a security deposit you pay or the amount you put into an attached account, such as a savings account. For example, if you deposit a $500 security deposit, your secured credit card limit will likely be $500.

With a good payment history and credit usage, your credit limit may increase and you can get your deposit back. You may even have the opportunity to upgrade your card to a traditional credit card.

questions and answers

How long does it take to repair your credit?

This depends on how your credit is affected and the severity of your credit problems. While some can repair their credit in a few months, others may find that it takes a year or more to see serious improvements.

Are Credit Repair Companies Scams?

There are some legitimate credit repair companies that can help you dispute errors on your credit report. However, there is nothing these companies can do that you cannot handle on your own through the credit bureau dispute process. If you choose to use a credit repair service, beware of any company that does not explain your rights as a consumer. Also, if a company asks you to pay up front or promises to accurately remove negative marks from your credit report, it could be a credit repair scam.

Will closing a credit card with a bad payment history increase my score?

Closing a credit card with a poor payment history will not increase your score, and may actually lower your score temporarily. When you close a credit card, it reduces your available balance and increases your credit utilization ratio. If it’s one of your first cards, it may also lower your average credit history. All of these factors can harm your credit score.

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