What if I Have a Bad Credit Score?

Money 101

What if I Have a Bad Credit Score?

What if I Have a Bad Credit Score?

Everything you need to know about fixing bad credit in the US

Credit scores are one of the unique financial tools used in the US. It gives banks an idea of how reliable you are in repaying loans and making payments on time. A credit score looks at your complete financial history and then gives you a number between 300 and 850.

The higher the number, the better your credit.  Good credit improves your chances of getting a loan or getting approved for a credit card.  Having a good credit score is very important in the US.  But what happens if your credit score is not where you want it to be?  There are things you can do to improve it. 

How can I check my credit score?

Before you can improve your credit score, you need to know what it is.  There are several ways you can check it for free.  The three major credit bureaus in the US are Equifax, Experian, and TransUnion.

Once a year they are required to give you a free copy of your credit report. You can do this online. There are other ways to check it, too. Below is a list of websites you can visit and apps you can use for free reports.  

  • Credit Karma 
  • Freecreditreport.com 
  • Credit Wise from Capital One 
  • Chase Credit Journey 
  • Discover Credit Score Card 
  • Credit Sesame 
  • Credit.com 
  • Mint: Money Manager, Budget & Personal Finance 

How can I improve my credit score?

Having a good credit score means getting lower interest rates on credit cards and loans.  Lower interest rates are good because they save you money.  Most people only think about their credit score when they know they are going to need it. Take, for example, before you buy a car or rent an apartment.

But you should always know what your credit score is.  If it needs improving, you’ll need some time to work on it. Fortunately, it’s not hard to improve a credit score, just time consuming.

Here are some tips. 

  • Review your credit report.  Use one of the websites or apps listed above to get a free copy.
  • Dispute negative marks. If there is something on your credit report that has been resolved, like an unpaid medical bill, let the agency know.  Most disputes can easily be done online.
  • Increase credit limits. Carrying a balance of more than 50% of your available credit will impact your score. For example, if you owe $5,000 on a card with a $10,000 limit, get it increased to $12,000.  Your ratio of available credit to credit used will increase and help your score.
  • Pay off your outstanding balances.  The more debt you pay off, the better.
  • Keep your old credit cards. The “age” of your credit history has an important impact on your score.
  • Pay all your bills on time. Even one late payment can hurt your score.

Need help restoring your credit score? Check out our discount partner, Credit Recovery Group. They’ll help you every step of the way to better credit. Plus, if you’re a MAJORITY member, you’ll get $50 off their services! Learn more.