I have really poor credit, how can I begin to fix it?

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A good credit score can take years to build but if you are diligent about following these steps you should start to see results in a few months.

Avoid any new derogatory actions. Each new delinquency, collection, lien or charge-off on your credit report will affect your credit score for years to come. Often the only way to compensate for these negative attributes is with time. Avoid these actions by limiting your spending or restructuring your debt. Restructuring may be difficult with a low score so it is best to avoid the debt in the first place.
Don't take on any new debt. Your debt load is a significant contributing factor in your credit score. The first step in eliminating debt is to stop accumulating new debt. This means having the will power to reduce spending on non-essential items. We understand this can be a very tough step, but it has long lasting effects on your credit score.
Plan a budget to get out of debt. After reducing new debt, paying down your old debt is often easier. The best strategy is to make a budget and stick to it. Create a monthly budget of your income and expenses including a reasonable plan to pay down all your debt. As always, start with paying more towards the credit with the highest interest rate first.
Build a good payment history with responsible credit usage. Credit cards are not evil if you are responsible and they can be a great convenience if you have restraint. If you don’t have any credit cards, apply for a credit card designed for people with poor credit. Often these cards will have high fees (this is a cost of having poor credit). With this new card, use it once or twice a month on essentials and pay it off in full each month. Demonstrate responsible credit usage, develop a strong payment history, and stop taking on more debt. These are some recommended credit cards for people with poor credit if you need help.

If you don't think you have the restraint to spend responsibly, then skip this step and stick to cash or debt cards.

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Comments

(146 Total Comments)

I wasn't aware that I was in debt. Is there a way that I can find out who I owe money to? "

amber33 at 6:14 pm Feb 1

You should inquire at www.annualcreditreport.com to see if you qualify for a free government report. Otherwise, you will have to purchase the reports to see the company that you need to pay.

CK Moderator

Hello! Recently my score dropped from 656 to 580 over the course of a month! How is this possible? My credit amount and debt amount hasn't changed this month - I have never had a late payment, and I haven't been spending using my credit cards as much this month. "

mooniquec at 3:44 pm Jan 30

I have a credit score of 595, but back in Nov 2009 it was 607. Why did it drop so much even though I haven't incurred any extra debt or been delinquent on any payments? What can I do to raise my score? I am already paying off my student loan debt and making the highest payment I can every month on my credit card. "

bsavory at 12:34 pm Jan 27

hello. I just found out my credit score is 513. I have 10 accounts, 1 open,9 charged off and I have a total debt of over 14,000. Even though 9 is charged off does it mean that I have to pay to boost my credit score? I need help. What should I do? "

akweley at 1:20 pm Jan 23

I have a 509 score. Every simulation I do it doesn't change. I am in school. I have student loans out that are in deferred payment due to being in school. I pay my cell phone on time. I pay my car note on time. My credit was destroyed by my ex and I don't know how to fix it. I really want to get it up to 700 as soon as possible. Any suggestions? "

KassK at 11:27 am Jan 22

The impact of negative things on your credit report which affect your credit score will diminish in time. Under 2 years, within 2 to 4 years and 4 to 7 years seams to be the break down. Negative stuff under two years will have a dramatic impact. "

Tips: reduce your credit card utilization to below 30%. Get a secure credit card if you can't get a credit card. Only use credit cards to use and improve credit. Clean up your credit reports and work to clean up inaccuracies. Save for emergencies. Number One tip: Live below your financial means for a happier, healthier life. "

crcurran at 11:40 am Jan 26

I have a 550 score. i have no debt. i just dont have any established credit. what should i do to build it up. I have had a secured credit card for a few months "

qbyrd21 at 10:52 pm Jan 20

A secured credit card is a good start. Consider an unsecured card in a few months when your score improves.

CK Moderator

I have a credit score of 526 My problem is I have over 16 thousand in doctor bills That will be removed in the next 3 years If I start paying on them now I will be paying for over 20yrs So would it hurt just to wait the 3yrs out or should I start paying on them? Thanks "

tony17536 at 1:22 am Jan 20

im at 509 now hopefully after i pay off about 5 grand worth of bills it starts to get better "

mcnerney1 at 7:35 am Jan 18

How often is your info updated? I plan on paying off all my credit cards within the next few months, when will I see the results? "

hgibson9 at 1:05 pm Jan 17

We update in real time.

CK Moderator

I pay my bills on time, pay off my credit cards each month, and only have a car loan as debt. What can i do to keep my credit from falling. I want to raise my score and keep it back in the 700s. "

Castillo87 at 6:57 pm Jan 15