Having a less than stellar credit score is nothing to be ashamed of. Credit issues can happen to anyone, and bad credit scores can be the result of overwhelming student loan debt, business failures, sudden and/or long-term illness and many other factors. The good news is that bad credit can be improved, and a bad score can be reversed. Here are six ways to do it:

Rent an Apartment

When you have a bad credit score, you need to clean up the mess and then begin to rebuild your credit. One way to do this is to use a third party that will report your on-time rent payments to the credit bureaus. While your monthly rent payments will not have the credit score weight that an on-time mortgage payment would, your score can benefit from any positive information reported. So, even if home for you is just a small Chicago apartment or a studio unit in New York City, you’ll be working your way toward better credit.

Deal with the Creditors

If you owe a lot of credit card debt, and you have let it slip to delinquency, your creditors will report your late payments every month to the credit reporting agencies. 

This will continue to injure your credit score. Eventually, credit card companies may charge off your debt and sell your account to a collection agency. Then, while your original creditor considers your debt to be gone since someone else owns it, and depending upon your state’s statute of limitation laws, you many be hounded by creditors for years. 

Before a debt ever goes to a collection agency, try to deal with the original lender. After you have been past-due for a couple of months, many credit card companies will work with you to lower your payment and your interest rate while giving you a chance to become current again.

If you do have a load of credit card debt, avoid the temptation to get more cards in order to pay off the ones you have. The technique of transferring balances from one card to another will, for various reasons, eventually catch up with you, and you will not have made any progress toward taking care of the original credit card debt issue.

Understand Your Student Loan Debt

Know the difference between private and federal student loans. While federal student loans come with a variety of payment plans, deferments and forbearance plans, private loans are more difficult to deal with. Federal loans can be consolidated but private loans are usually not allowed in federal loan consolidation plans. You can get all of your federal student loan options explained without charge from your loan servicer, so don’t pay someone to give you the same information you could receive for free form the servicers.

Consider Contract for Deed When You Purchase a Home

While your bad credit score can bar you from traditional mortgage loan eligibility, there are alternatives, and contract for deed, especially in states like Minnesota, has been a proven, safe and regulated method for non-traditional home financing. Then, when your contract is in place and you are making timely payments, encourage your lender—probably an individual—to report your timely payments to the credit reporting agencies.


Credit bureaus feel that housing costs take precedence, and so anyone that can’t make steady monthly rent or mortgage payments will quickly see that practice kill their score. If you have to be late on something, make sure that it is not your mortgage or rent payment.

If your credit score is weak, start today to clean up the mess. If you need help, there are many government resources available to guide you, and start here.

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