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What to Do When You Have Bad Credit

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Many people in the US find themselves in a situation where they have bad credit. This can be due to various reasons, but regardless of why it happens, it’s difficult to get around if you have a poor credit score. If you need a personal loan, some places give loans for bad credit profiles, and there are various steps you can take to get by if you have poor credit.

What is a Bad Credit Score? 

A bad to poor credit score is when you have a score between 350 to 660 out of a possible 850. You should try and score above 661 to be deemed financially healthy. If you have a bad credit score, it impacts various parts of your life. 

Besides struggling to be approved for loans, you can also have difficulty getting approved for a rental application. Many companies do background checks before hiring new employees, and a bad credit score can impact your ability to get a job. You’ll struggle to get a cell phone contract and may have to make a security deposit on utilities. You can even pay more on insurance in some states. 


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Your credit record stays active for seven years, according to FICO, and your credit will be visible whenever you apply for a loan, apartment, or new job. 

How Can You Improve Your Score?

If you have a poor score, there are a handful of things you can do to fix it. 

Check Your Score

You can use the FICO website to check your credit score. It’s good to stay updated with what’s going on in your finances. Look at what is helping your score and what is negatively impacting it. 

Look at your payment history and whether you make all your payments on time. How much credit is available for your use and how much you’re actually using also has a huge impact. How long you’ve had credit available and the variety of credit you use also impacts your score.

Make Payments on Time

One of the biggest factors influencing your credit score is missed payments, counting 35% towards your final score. Even if you miss it by a few days, it can show up on your report as a missed payment. You can set up an autopay function with your bank to ensure that bills like student loans and car payments are always paid on time. You can do this for all your recurring bills. 

You can also change payment dates with creditors if too many bills are due on the same day, making it difficult to pay. It can take a few billing cycles to come into effect, so ensure that you still make payments while you’re waiting. 

Get Your Debt Under Control

30% of your score is about your debt utilization. If you are using too much of your available credit, it reflects badly in your score. Ensure you pay off as many of your loans and other debt as possible, or look into debt consolidation to make payments easier. 

Avoid New Debt

New debt applications can negatively affect your score if you focus on increasing it. 10% of your score is about new debit applications.  You can make soft enquiries, which won’t affect your score, but a hard enquiry, where the lender checks your score, will impact it. 

Final Thoughts

Even though having a bad credit score can negatively affect your day-to-day life, it doesn’t have to be a permanent problem. While it can take a few months to a few years, you can improve your score by being disciplined with your finances and taking a few easy steps.


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