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4 tips for fixing an awful credit score

Your credit rating may be deeply damaged, but it's not beyond repair.

By MSN Money Partner Nov 26, 2012 6:37PM

This post comes from Jeanne Kelly at partner site logoA lot of credit advice is written to help people whose credit is somewhere between the "good" and "not-so-good" range. But what if your good credit has been destroyed?


Image: WorriedMan (© Corbis)It's easy for it to happen, especially after a divorce, bankruptcy, job loss or some other stressful event.


At rock bottom, things can feel bleak. It can feel as if there's no hope. But the good news is, many people have gone through the same thing and survived -- and even thrived -- as they rebuilt their credit.


Fix the errors.

Before you do anything else, get your credit reports and go through them with a highlighter, checking to see what information is there -- and especially checking for errors. Errors in credit reports are common, and it's hard to rebuild your credit when you have errors counting against you. Start there. Dispute the errors and make sure that your credit reports are truly a picture of you.


Lower credit card balances.

You might have some credit card accounts with high balances. If you start to pay those balances down, it can boost your score. One of the keys to raising your credit score is minimizing your credit utilization (balance/limit ratio on cards), which tends to be optimal when below 20%. If you're unable to get your balances down to 20%, work on paying them down as best you can, and you're likely to see steady improvement as you do.


End late payments.

Late payments can really hurt your credit score, so do all you can to avoid them. If you can't pay the balance in full, pay at least the minimum amount so that it will not count as late on your credit reports. While you might still have some past late payments haunting your credit reports, commit to no late payments moving forward, and over time it will have a positive impact on your credit scores.

Use a secured credit card.

If your credit score was lowered, it can be hard to get another loan, yet proof that you can repay loans is exactly what lenders want to see. Rebuild your credit history positively by getting a secured credit card (which is a credit card that requires you to deposit some money first as security). The credit card will count the same as a regular credit card when your credit scores are calculated, and you'll rebuild your credit history with positive, on-time credit card usage.


When your credit score hits rock bottom, it can feel like many of your dreams and goals in life need to be put on hold, and it can be hard to see any light at the end of the tunnel.


Fortunately, all is not lost and many people come back from bad credit to achieve rebuilt credit and a rebuilt life. You can, too.


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Nov 27, 2012 11:10AM
The only reason you would need to fix your credit (debt) score, is to go further into debt. Why would you want to do that?? Pay off all your debts, start an emergency savings account, and start living your life within the limits of your income. You don't need a credit score for anything. They have you fooled if you think you do. Get out of debt, stay out of debt, and feel free again.
Nov 27, 2012 12:27AM
f the credit score, i can live with out it !
Nov 27, 2012 10:40AM
Nov 27, 2012 1:22PM

the credit scoring system is flawed. I never had credit tried to get a credit card to built credit. Was told I had to many inquiries (from trying to get credit). Paid $600 dollars to get a secured card, paid it on time every month for the last 6 months put my score a 623 wtf. All I want is to buy a home you know something that everyone wants, but my credits not good enough because I don't have enough and if you try to get more the inquiries will bring you score down more. Its a flawed system!


Nov 27, 2012 2:00PM
I haven't had any credit card or loan since 1997. Pay cash or walk away.
Nov 28, 2012 12:16AM

People, get out of debt soon. It's not easy, I know from experience. I have been out of debt (except for a small mortgage on my home) for 20 years now. Don't be fooled by some in the media and some fools on here who say a great credit (debt) score is the way to go, It is 1 way to go, but not the best way. The only way to get a "credit" score is to go into debt, and pay it off. Sounds easy, but as most people know, it is very easy to get into trouble. You do not need a credit score for anything. You can rent a car, buy a car, rent an apartment, buy a house, and do everything you want and need without a credit score. My credit score is 0. It may be difficult to get out of debt, but not impossible. Being debt free is true freedom. You CAN do it. If you need somewhere to start, google Dave Ramsey, he has some good ideas. I followed his advice, and now I go to sleep at night knowing if something unexpected happens, (like the economy tanks, 1 of us loses our job, a medical emergency crops up, etc), everything that I have, I OWN. Nobody can come calling to take it away. That is why we all should be debt free. If I can do it, we ALL can! Peace.

Nov 27, 2012 6:00PM
I once had my identity stolen.  They improved my credit score by 90 points!
Nov 26, 2012 10:22PM
its impossible to change your scores if you are now older and relying on a fixed income where as before you had a job? so how can one get out of that?
Nov 27, 2012 4:05PM
I really hate being just a number in a computer.
I wanted to start a bank account with The CoOp bank, I've had a 'control' account with them for years now, and they are ace, I love them as a bank for many reasons. I wanted to change to a regular account, with no overdraft or credit, but they declined me based on my credit score. That's when it gets scary, when your credit score prevents you from getting an essential service that is required for paying wages into. This whole system is bad.
Jan 9, 2013 9:35AM
I wish all those credit score places would go out of business. This credit score stuff isn't anything but a bunch of crap anyway.
Nov 27, 2012 4:21PM
I don't care one thing about a credit score! If mine is 1000 or 100, I do not give a rip!  I had to call a senator in California to get some dumbash credir score bunch to stop contacting me.  Hasn't worked entirely but it did help a lot.  I will not vote for anyone currently in Washington for this and many other reasons.  The guvymint gives you one free credit score report yearly and I have never gotten that one. Don't care about it.  When you get that one, then some companies will charge you about 13.95 monthly for 11 more.  Such a dumbash ripoff.  If I can't borrow money without a credti reprt, I don't want to borrow the money.  I know banks use credit scores but the quickest way to get out the door is to mention a credit score after I tell them I don't care about it.

There are several reasons to maintain a good credit rating, aside from "getting further into debt".  Statistics show that those with higher credit scores are better drivers.  Guess what -- that means an insurance company might want to check your credit report before giving you an auto policy, or giving you insurance at a better rate.  Want to rent an apartment?  Guess what -- they're going to run your credit report.  Traveling and need to stay at a motel?  Same thing -- they want to see a credit card, not cash.  (That last is because if after you've left they find you damaged the premises , they can collect through the credit card but not if your cash has already left town.)  Many card companies offer cash back for the use of their card, so if you pay off every month on time, you ultimately pay less by using the plastic.  BTW, there is no "zero score".  If you lack credit entirely the credit companies simply state that no score was calculated due to insufficient data.  Lenders usually have a separate policy for dealing with these individuals.  Generally that means they will consider your loan request, but at a higher interest rate than they offer others with established satisfactory credit.  Getting good credit takes time -- don't expect to go from no credit to an awesome score in six months.  Be patient, prudent, and don't make impulse purchases.  You'll come out way ahead.


Nov 27, 2012 3:11PM

The debt free crowd of (un-educated) is out today. Simple, building a great credit score is using credit and paying it as you use it....without accruing debt. So, being debt free with a great credit score is what educated people do. Using credit is safer than cash, and safer than a debit card.


Building a great credit score without accruing debt is a simple easy is great, and for most of you here, I recommend you get that is. Learn how to build a great credit doesn't take going into debt and stop ready Dave Ramsey.....get educated....

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