There may be no magic overnight formula, but if you currently have bad credit (which can also be referred to as having a poor or below average credit score) there are a number of things you can do to help fix it, starting today.
First, let’s understand what bad credit (or a below average score) looks like and then we will look at 5 easy to follow steps which are guaranteed to help improve your bad credit and increase your credit score.
What does Bad Credit mean?
Bad Credit refers to when your credit history (recorded on your credit file) is considered bad. Missed repayments, loan defaults, debt agreements and bankruptcy are all defined as bad credit behaviour. Credit bureaus then use this information to calculate your risk as a borrower, which is reflected as your credit score.
As a general guide, anything below 550 is considered a bad credit score. A good score is 700 or more and anything over 800 is excellent, however this can slightly vary depending on which credit bureau you obtain your credit report and credit score from.
For example, below are the descriptions and scores Equifax use, but as you can see, they still align closely to our general guide.
|Below Average||0 – 509|
|Average||510 – 621|
|Good||622 – 725|
|Very Good||726 – 832|
|Excellent||833 – 1200|