Free Credit Report guides

How to fix a bad credit score

If you haven’t used credit responsibly in the past, your credit score might be a bit out of shape. And if you’re hoping to be accepted for credit in the future, it’s important you think now about how to fix a bad credit score. Here are some tips to help.

bad credit

How to start fixing a bad credit score

First things first: to fix a bad credit score, you need to know what your credit score is.

A good way to find out is to sign up for your TotallyMoney Free Credit Report and Live Score. Your score is calculated in real time and is updated each time you log in, so you always have the most up-to-date view of your financial health.

TotallyMoney uses data from credit reference agency Callcredit to build your Free Credit Report and Live Score. You can see what your credit score means in terms of your credit rating by looking at the table below.

Score Band Rating
0–550 Very Poor Rating 1
551–565 Poor Rating 2
566–603 Fair Rating 3
604–627 Good Rating 4
628–710 Excellent Rating 5

 

If you fall into ratings one or two, you need to be thinking about how to fix your bad credit score. Fortunately, the five tips below might be able to help.

Five tips on how to fix a bad credit score

1. Never miss a payment — it will make your bad credit score worse

it’s a payment for a credit card, loan, mortgage, or even a utility bill, keeping on top of them can be a great way to fix a bad credit score.

The easiest way to stay up to date is to set up direct debits. We can all be forgetful, but setting up a direct debit means you won’t have to rely on your memory and will help protect your credit score.

Missing a payment, on the other hand, can dent your credit score for years.

It’s a good idea to get in touch with your lender if you’re struggling to stay up to date with your repayments. Sometimes, you’ll be able to arrange a repayment plan that harms your credit rating less than missing payments altogether. Lenders should treat you sympathetically if you’re in financial hardship.

Whatever you do, don’t ignore the issue. It won’t go away, and certainly won’t help fix a bad credit score.

2. Check your credit report for errors — it could help you fix a bad credit score

Sometimes, lenders and banks make mistakes. And if they make mistakes, it means incorrect information will be passed on to credit reference agencies.

That’s why it’s best to get into the habit of checking your credit report is accurate at least once a month.

Errors can include misspelt names, incorrect addresses, and wrongly recorded payments (it could say you’ve missed a payment when you haven’t, for example). Getting errors corrected can help fix a bad credit score.

To start, sign up for your TotallyMoney Free Credit Report. It could help you fix a bad credit score and takes just a few minutes.

3. Cut your debt by using savings

One way to fix a bad credit score is to reduce your overall debt. This might sound obvious, but many hold on to savings while they owe money.

This isn’t good for fixing a bad credit score, nor is it any good for your overall costs. You’ll pay more interest on your debts than you’ll earn on your savings with the base rate currently being so low.

Although you may feel more comfortable having savings, it’s worth knowing that if you use them to clear your debt, not only will you pay less interest, you’ll also have more available credit.

This means that in those moments where you’d rely on your savings (an emergency, for example), you can use credit instead.

4. Consider using a credit card — responsibly

If you want to fix a bad credit score, you have to show lenders you’re capable of borrowing money and paying it back when you should.

One of the easiest ways to do this is to use a credit card responsibly. Preferably, this means paying off the full balance each month, but if this isn’t always possible you should make at least the minimum payment, ideally more.

To avoid missing payments, you should set up a direct debit each month. It’s also a good idea to check your eligibility before you apply for a credit card, as you can then apply for the cards you’re most likely to be accepted for.

5. Consider a prepaid card if you can’t get a credit card

You don’t need a credit check to get a prepaid card. They work a bit like a pay as you go SIM: you top it up and spend on it like you ordinarily would.

For a prepaid card to help fix a bad credit score, you need to choose one that has a monthly fee. Although this can be off-putting, a note will be recorded in your credit file as having successfully paid a debt if you keep up with your monthly payments. In time, this can help fix a bad credit score.

For more tips on how to fix a bad credit score, we recommend you read our guide: ’11 tips on how to improve your credit score’.