Do you have a bad credit score? Well, you are not alone. A lot of people in the US have bad credit scores. However, you can improve your credit score and stand a chance of getting loans with low-interest rates.

Statistics show that 16% of Americans have bad credit scores between 300 and 579. That means they cannot access loans, and if they do, the interest rates are so high.

This blog explains credit scores and tips to improve if yours is lousy. Remember that a good credit score can help you get financial help whenever needed. 

We can advise you on financial matters and help you live a healthy life. Get in touch for more information.

Following the information in this blog can help you turn your financial situation around. 

Keep reading.

What is a Credit Score?

A credit score determines how you manage your debts. It ranges from 300 to 850. Having a good credit score means you have been paying your debts on time and in full. A bad credit score indicates that you have defaulted on your debts or always paid your bills late.

Credit Score RangeStatus
300 to 579Poor
580 to 669Fair
670 to 739Good
740 to 799Very Good
800 to 850Excellent

As you can see from the tale above, a bad credit score ranges from 300 to 579. In this bracket, you only access small loans with very high-interest rates, like payday loans.

However, we have several techniques you can use to improve your credit score in the US.

Tips to Improve Your Credit Score in The US

1. Get your credit reports

Of course, you cannot improve what you don’t know. Therefore, the first step to improving your credit score is learning your detailed credit report. You get your credit report from any of the three credit bureaus.

Every American is entitled to a free credit report from any credit bureau through AnnualCreditReports. Once you get your free copy, it’s easy to monitor and improve your credit score.

Regular credit reports also help you identify mistakes that can affect your credit score. Remember that a small error in the report can affect your overall loan.

2. Pay your debts on time

Paying your debts on time is an excellent way of improving your credit score in a short while. Always ensure you pay all your bills plus credit card debts on time. 

Actually, the only sure way of staying on top of your financial progress is by paying your bills on time. Therefore, whenever you are taking loans, ensure you take a loan you can repay comfortably. In addition, it also helps you to gain financial freedom.

improve your credit score

3. Keep your accounts open

Your accounts matter a lot when building your credit score. These accounts help keep your credit history length, which will be a good way to improve your credit score. 

Closing old accounts removes them from your credit score report.

Long-term accounts help to improve your credit only if you keep them clean by paying off the debts on time.

4. Don’t register new accounts

Always limit the loans you take. Living in a debt pit is a bad financial choice, making you rotate in one milestone for a long time. Therefore, do not open new credit accounts if the old ones are becoming a burden. Instead, search for new ways to make more money to increase your income sources.

5. Get credit builder loans

If you have repaid your debts, you can take credit builder loans from potential lenders. These lenders will report your payment behaviors to any of the three credit bureaus. The more you pay them, the more you improve your credit score.

However, these loans usually have a high-interest rate, but it’s always worth the sacrifice because you can build your credit to above 740.

The Bottom Line

Improving your credit score is an excellent idea to help you secure future loans at affordable rates. A good credit score is a way to go, especially if you plan to get large loans like car loans or mortgages.

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Frequently Asked Questions

  1. How can I improve my credit score in 30 days?

The best way is to pay off your debt and lower your debt-to-income ratio. In addition, ensure you check for any mistakes in your credit score that could be a turnaround for your credit score.

  1. What contributes to a low credit score?

Late payments for your debts are usually the biggest contributor to a low credit score. In addition, a short credit history also has a bad impact on your credit score. That’s why you should not close old accounts.

Cecilia Malika

I have been a financial writer for the whole life of my writing career. I'm always versed in the current trends in the finance industry. My main goal is to educate as many people as possible about financial independence.

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