Bad Credit? How To Improve Your Low Score in 12 Months

Last Updated on June 1, 2021

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Bad credit can be very frustrating. Every time you think you have a handle on it, another bill comes up you can’t pay. Here are a few ways to improve your credit score in just 12 months.

Don’t Miss a Payment

Paying on time, paying early, paying late, not paying at all – that’s called your payment history, and it’s one of the most important factors when determining your credit score. Paying on time will help you improve your credit score over time.

You don’t want to miss a loan or credit card payment. If paying on time is difficult for you, at least make sure you pay the bill within 29 days. Payments that are 30 days late can be reported to the credit bureaus and hurt your credit score even more. On top of paying late and hurting your credit score, the company will tack on a late fee to the charge.

Catch Up on Past-Due Payments

If you’ve missed payments in the past, and you’re behind on paying your bills, try working on paying those off first. A late payment can stay on your credit report for years, but having all of your bills paid off can still help improve your credit.

Limit How Often You Apply for New Accounts

When you request a new credit card, you have to submit an inquiry. There are two types of those, “hard” and “soft”, a hard inquiry can hurt your credit score. While these inquiries are very minor factors in your overall score, a hard inquiry can adversely hurt your score. Try avoiding applications for new cards and opening new accounts, work with the ones you have first.

Work Around a Thin File

Establishing and building credit can be really difficult. Having a “thin file” means having very little to no credit history. This is where FICO Scores come in. With these, you need to have an account that is six months old or older.

When you have bad credit it’s important to work on building your credit file. You can use tools like Experian Boost and VantageScore. The latter works as soon as an account appears on your file and report. Work on building up your savings, paying bills on time, and avoid overdrafts. All of these will help build up your file and improve your credit score.

This is all good advice for improving bad credit. But what if you’re planning a summer trip or home renovation and need a new credit card now?

Don’t worry. There are still options.

OpenSky Secured Visa Credit Card

Even if you have bad credit, it’s possible to get approved by OpenSky. You won’t get many rewards out of it, but it’s a good choice if your credit score is low. There is no credit check for new applicants. OpenSky’s main benefit with this card is the opportunity to build credit at a reasonable cost. The credit card’s annual fee is only $35.

Indigo Mastercard for Less than Perfect Credit

This is an unsecured credit card for people with bad credit. It offers a $300 credit limit with no security deposit. This card is perfect if you have bad credit that you need to repair quickly. The card’s annual fee ranges from $0-$99, which is worth paying if you need a credit card with no deposit.

Credit One Bank Visa Credit Card

This is a decent, unsecured credit card for people with bad credit. The Credit One Visa offers an initial $300 spending limit, similar to the Indigo Mastercard, and no security deposit is needed. In return, however, the annual fee can cost up to $99.

The bright side of this credit card is that the company offers cash back rewards, as well as a monthly credit-bureau reporting, which is great for when you need to stay on top of your score and watch it improve.