Bad Credit? What It Takes to Up Your Score

Having a poor credit score could make it harder to get low interest rates on loans or find a job. It may also make it harder to find an apartment or get approved for a cell phone plan. Let's look at some ways that you can improve your bad credit no matter how bad it is now.

Make Your Future Payments on Time

Depending on your current credit situation, it may not be wise to pay old late or missed payments. This is because creditors generally can't pursue them after a certain number of years. 

One exception is if you choose to pay the debt off or make a partial payment as that restarts the statute of limitations clock. Ideally, you should focus on making your future payments on time as the most recent information on your report gets more attention than older information.

Nothing Gets Reported Forever

Except for a Chapter 7 bankruptcy, information on your credit report remains there for seven years after is first added. If you do file for Chapter 7 bankruptcy, it will remain on your credit report for a decade. 

Therefore, simply making better decisions today and avoiding any future missed payments or black marks will necessarily lead to better credit.

Monitor Your Credit Report

If you were to ask credit repair professionals their top 10 ways to improve a credit score, credit monitoring may be on those lists. This is because an error on a credit report could reduce a person's score by dozens or hundreds of points. 

If a person is a victim of identity theft, it may be months or years until he or she realizes what has happened. By then, the problem may be much more difficult to solve.

Talk With Your Creditors

It may be possible for one or more creditors to agree to accept less than what you currently owe to settle a debt. If debt forgiveness is not an option, it may be possible to get a lower interest rate on future payments. 

This may help you reduce your debt balances, which could lower your debt-to-income ratio. Ultimately, reducing your debt can help improve your credit score.

If you have a bad credit score, there is no time like now to start improving it. In as little as a few months, you may notice that efforts to increase your score are starting to pay off. 

Over the course of 12-24 months, it may be possible to go from having subprime credit to being labeled as a responsible borrower.