The First 5 Steps to Take When You Have Bad Credit
Realizing your credit score has taken a hit can be overwhelming. But the good news is, bad credit isn’t permanent. With the right steps and a bit of patience, you can fix bad credit, rebuild your financial standing, and take control of your future. If you’re not sure where to begin, here are the first five essential steps to repair credit and start improving your score today.
1. Check Your Credit Reports for Errors
The first step in any plan to rebuild credit is to know exactly what you're dealing with. Request free copies of your credit reports from all three major credit bureaus (Experian, Equifax, and TransUnion) at AnnualCreditReport.com. Review each report thoroughly for:
Incorrect late payments
Accounts that don’t belong to you
Duplicate entries
Outdated information or balances
If you spot anything inaccurate, file a dispute immediately. Fixing these errors is one of the fastest ways to improve your credit score. The dispute process can take up to 30 days, so it’s important to start early in your credit recovery journey.
2. Pay Your Bills on Time, Every Time
Your payment history accounts for 35% of your credit score, making it the most important factor. Even one missed or late payment can damage your score and stay on your credit report for up to seven years. To avoid this:
Set up automatic payments or reminders
Prioritize paying at least the minimum on all bills
Catch up on past-due accounts as quickly as possible
If you're struggling to keep up, reach out to creditors to ask about hardship programs or modified payment plans. Consistency moving forward is key to rebuilding trust with lenders.
3. Tackle Your Credit Card Balances
A high credit utilization ratio (the amount of credit you’re using compared to your limit) can seriously hurt your score. Aim to keep your utilization below 30%, and ideally under 10%, across all accounts. Some strategies to lower your balances include:
Paying more than the minimum each month
Making multiple payments throughout the billing cycle
Paying down the highest-utilization cards first
Requesting a credit limit increase without increasing your spending
Lowering your credit usage is one of the most effective ways to improve your credit score quickly.
4. Avoid Opening or Closing Credit Accounts
Opening new credit accounts results in hard inquiries, which can lower your score temporarily. And while it might seem smart to close unused cards, doing so can reduce your available credit and negatively affect your credit utilization ratio and average account age. To protect your score:
Avoid applying for new credit unless absolutely necessary
Keep older accounts open, even if unused
Focus on maintaining the accounts you already have in good standing
Stability and responsible use over time are what lenders look for.
5. Get Help from a Credit Repair Professional
Sometimes, fixing bad credit on your own can feel overwhelming, especially if you're facing complex challenges like collections, charge-offs, or identity theft. That’s where a trusted credit repair company like Credit Freedom can make a big difference. Credit repair experts can:
Help you analyze and understand your credit reports
Dispute inaccurate or unfair information with the bureaus
Assist in negotiating with creditors
Create a custom plan to rebuild credit over time
With expert support, you can move forward with confidence and clarity.
Start Your Credit Comeback Today
Bad credit doesn’t define you, and it doesn’t have to be permanent. By following these five steps to repair credit, you’ll be on your way to rebuild credit and improve your credit score. Whether you go it alone or enlist expert help, every positive step counts. Contact Credit Freedom today to start your credit recovery journey with guidance you can trust.