A “fair” credit score certainly isn’t the best someone can achieve, but the rating is better than poor. And for those who have a poor credit score, moving up to fair may prove faster and easier than improving to excellent
The possibility exists that someone could go from the bottom of the credit score ratings to the top, but such steps take time. Those in the poor rating range might want to focus on rising to fair levels.
The Credit Score Numbers
Per Equifax’s rankings, a poor credit score involves receiving an overall numerical rating between 300 and 579 suffers from poor credit, while 580 to 669 reflects fair. Several factors contribute to an overall credit score, and the lower the score, the higher interest one could expect to pay on a loan if approved in the first place.
Low credit scores may result in negative responses to loan and credit card applications. Other woes may follow, too. Employers or landlords might perform background checks, and a poor credit score may not work in someone’s favor. So, improving low numbers might need to be a top priority.
Addressing High Credit Card Balances
High balances on a credit card could drive down a credit score significantly. The debt-to-credit ratio shows how well – or poorly – a credit card account holder manages their finances.
Someone with maxed-out balances does not appear like a person capable of handling credit. Paying down the debt and lowering the ratio seems advisable, but making payments does little when the cardholder turns around and charges more purchases or cash advances.
Make Payments On Time
Late or missed payments could have a drastically negative impact on credit scores. Making a concentrated effort to pay at least the minimum balance on time could avoid late payment marks.
Perhaps setting up automatic payments on a credit card or loan account might be helpful. Those who cannot make a payment when due may call the credit card company and inform them of the problem. Perhaps the lender will accept a partial payment or otherwise work with the customer.
Rebuilding a Credit History
Some persons with poor credit might no longer have their credit cards. Yet, making charges and paying on time might be necessary to rebuild a credit history. If poor credit keeps someone from being approved for a new credit card, the option exists to procure a secured credit card.
These cards usually require a refundable deposit to safeguard against default. As SoFi notes, finding opportunities for “credit cards no deposit for bad credit borrowers” could be worth the effort. Not having to put up a deposit may allow the applicants to keep some funds in their pockets.
Allow Time to Pass
Negative marks on a credit report fall off after seven years, although bankruptcy filings may last longer. Working hard to improve a score requires proactive steps, but time will pass no matter what someone does. The key point here is not to add new negative marks after old ones go away.
Taking proactive steps to improve a credit score may raise a poor ranking to fair. Fiscal discipline and responsibility might be vital components of any plan.
