How to Turn Your Bad Credit Score Around

Turn your bad credit around and improve your chances of qualifying for low-rate financing deals. Bad credit can happen after you lose a job or deal with an illness because you may fall behind on payments or rely on credit card to make ends meet. However, regardless of the cause of credit issues, you can turn your bad credit around.

Instructions

1

Set up alerts to remember to pay your bills on time. Manage your accounts online and/or through your smartphone and request payment reminders a few days before your due date. Mailing a bill late or forgetting to pay a bill can hurt your score. Pay credit cards and loan statements on time each month to help turn your bad credit around.

2

Erase consumer debt or pay down balances. Ideally, balances on credit cards should not exceed 30 percent of your credit limit. Use cash for purchasing items and reserve credit cards for emergencies.

3

Review your credit report at least once a year to check for errors or problems. Identity theft, credit mistakes and other errors can have a negative impact on your score. Get free reports from AnnualCreditReport.com.

4

Work with creditors and collection agencies to pay off or satisfy debts and help turn around your bad credit. Creditors report collection accounts, charge-offs and judgments on your report, and these unpaid negative items lower your score and affect loan approvals.