How to Improve a Bad Credit Score

Your credit score matters—a lot. Whether you're applying for a credit card, a car loan, or even renting an apartment, a low score can hold you back. If you're wondering how to improve a bad credit score, you're not alone. The good news? It’s totally possible with a bit of know-how and consistent effort.

In this article, we’ll break down simple, beginner-friendly steps to help you raise that score and get your finances back on track.

What Is a Bad Credit Score?

Before we dive into how to improve a bad credit score, let’s quickly define what "bad" actually means. Credit scores typically range from 300 to 850. Here’s a general breakdown:

• 300 - 579: Poor

• 580 - 669: Fair

• 670 - 739: Good

• 740 - 799: Very Good

• 800 - 850: Excellent

If your score falls in the 300-579 range, it's considered bad. But don’t worry—you can definitely turn things around.

Need a refresher on what a credit score is and how it works? Check out this beginner's guide to credit scores.

Step 1: Check Your Credit Report

The first step to improve a bad credit score is knowing exactly what you’re dealing with. That means checking your credit report.

You're entitled to a free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once a year through AnnualCreditReport.com. This is the official site authorized by the government.

Look for any errors like:

• Incorrect personal information

• Accounts that don’t belong to you

• Late payments that were actually on time

• Duplicate accounts

These errors can unfairly hurt your score, so don’t skip this step. If you find something wrong, dispute it right away. Here's a simple guide to checking your credit report for free.

Step 2: Pay Bills On Time (Every Time)

Your payment history makes up about 35% of your credit score. That means paying your bills on time is absolutely essential.

Set up reminders, auto-pay, or calendar alerts to make sure you never miss a due date. Even one late payment can hurt your score significantly—especially if you're already working to improve a bad credit score.

If you find it difficult to pay on time because of budget issues, consider prioritizing essential bills (like your credit card, loan, and utilities) and trimming down on non-essentials. You can even try calling your lenders to request a different payment due date that aligns better with your payday.

Step 3: Lower Your Credit Card Balances

Credit utilization is the second biggest factor in your credit score. This refers to how much of your available credit you're using. Aim to use less than 30% of your credit limit. If possible, staying under 10% can help you see results faster.

For example, if you have a credit card with a $1,000 limit, try to keep your balance below $300. Better yet, pay off the full balance each month if possible.

Tip: If you're able, consider asking for a credit limit increase—but don’t use it as an excuse to spend more!

Also, paying down your balance more than once a month (like right before the statement closing date) can help reduce your reported utilization.

Step 4: Don’t Close Old Credit Cards

Even if you don't use a card anymore, keeping older accounts open can help improve a bad credit score. That’s because your credit history length affects your score, and older accounts contribute positively.

If a card doesn’t have an annual fee and isn’t hurting you in other ways, keep it open. Use it occasionally to keep it active, like buying gas or a small subscription, and pay it off in full.

Step 5: Consider a Secured Credit Card

If your credit is really low or you’re having trouble qualifying for a regular credit card, a secured card can be a smart way to rebuild.

With a secured card, you put down a deposit (usually $200-$500), and that becomes your credit limit. Use it responsibly, make payments on time, and over time, it can help improve a bad credit score.

Secured cards are often easier to get approved for because the deposit reduces risk for the lender. After 6-12 months of responsible use, you may be able to upgrade to a regular unsecured card.

Learn more about how to build credit from scratch—many of the same tips apply if you're rebuilding.

Step 6: Limit Hard Inquiries

Every time you apply for a new credit card or loan, a hard inquiry is made on your report. Too many of these in a short period can drop your score.

That doesn’t mean you should avoid credit altogether, but be strategic. Only apply for credit when you really need it. If you’re rate shopping for a car loan or mortgage, do it within a short time window (usually 14 to 45 days) so the inquiries count as one.

Soft inquiries (like checking your own credit) don’t affect your score, so check as often as you like.

Step 7: Settle Outstanding Debts

If you have collections or past-due accounts, try to settle them. You can:

• Pay in full

• Negotiate a payment plan

• Ask for a "pay for delete" agreement (where the creditor removes the account from your report after payment)

Getting these negative marks off your report, or at least updating them to "paid," shows lenders that you're taking steps to be financially responsible.

Some debt collectors are surprisingly open to negotiation. Be polite, firm, and get everything in writing before sending any money.

Step 8: Add Positive Payment History

One way to boost your credit score is by adding more positive history to your report. Besides secured cards, you can also try:

• Credit-builder loans: Offered by credit unions and some online lenders, these loans hold the money in a savings account while you make payments. When it's paid off, you get the money and a boosted score.

• Authorized user status: Ask a trusted family member or friend to add you as an authorized user on their credit card. Their good history can help lift your score (as long as they use the card responsibly).

• Report rent and utilities: Services like Experian Boost can help you get credit for paying bills you already pay every month.

Step 9: Monitor Your Progress Regularly

Improving a bad credit score is a journey, and it's important to track your progress. Many banks and apps now offer free credit monitoring, letting you see your score and get alerts about changes.

Review your report at least once every few months and track your score monthly. Seeing those numbers slowly rise can be a great motivation to keep going.

Final Thoughts

A bad credit score isn’t a life sentence. With the right strategies and consistent effort, you can improve a bad credit score and open up new financial opportunities.

Remember to:

• Start by checking your credit report

• Pay bills on time

• Keep balances low

• Avoid unnecessary credit applications

• Add new positive credit history

Need help taking the first step? Read our simple guide on how to check your credit report for free, and dive into our other beginner-friendly resources on credit and budgeting.

Improving your credit is one of the best financial moves you can make. It may take time, but every on-time payment, every paid-down balance, and every smart decision brings you closer to better credit. You've got this!