October 7th, 2010

Poor Credit Score? 3 Ways To Build Or Improve Your Credit Health

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**Welcome to Do Today Thursdays here at Credit Karma Bootcamp: Your 31-Day Credit Health Plan. Every week, we’ll cover the 3 most useful moves to do now for your specific credit score range.**

The Average Joe or Jane with poor credit has a Credit Karma credit score in the bottom 500s. Lenders will typically refuse to lend money or credit because Joe or Jane are considered high-risk / subprime borrowers. Subprime lenders, who may approve their application for a loan or secured credit card, charge exorbitantly high interest rates, additional fees, and offer limited options.

Many issues may have landed Joe or Jane in poor credit—a financial emergency like bankruptcy, years of neglecting credit, or maybe they’re just building credit for the first time. Either way, at the bottom tier of credit score range, they must work hard to gain the financial opportunities of a good credit score.

If this poor credit profile fits you, take heart–you aren’t stuck in an impossible situation. The key to building or improving your credit health is to be thorough, disciplined, and hard-working. The following 3 approaches aren’t just quick fix moves; they are three long-term strategies that work favorably together to address the past and present of your poor credit, and move towards a good credit future.

  1. Repair the past – Check your credit report. Pull your credit report for free and read through your report. Familiarize yourself with what items on your credit need a little do-it-yourself repair. Note and follow up on:
    • Incorrect information to dispute with the bureaus
    • Past due accounts that have been charged off or sent to collections (covered in #2)
    • Reoccurring bad credit habits—such as frequent defaults, maxed credit cards, or closed accounts—that you need to rectify

    Looking over your report reveals the details of your credit history that resulted in a poor credit score in the first place. Let it remind you why you must learn from these financial mistakes.

  2. Deal with the present – Settle accounts now. Unsettled, past due accounts will heavily weigh down your credit score, so taking care of these black marks on your credit report vastly improves your credit health. Your goal is to have your past due accounts marked “current” or “paid” on your credit report. If you have past due accounts that have not yet been charged-off, negotiate with your issuers to pay your balance and bring your account to current. If you have charged-off accounts, pay the accounts off to settle them and be rid of debt. If you have accounts sent to debt collectors, contact the collectors to take care of your accounts through debt settlement, debt consolidation, and any other necessary strategy. If you do not have any past-due accounts but other current issues like bankruptcy or foreclosure are killing your credit, make sure to fully comply with every step and necessary payment to make the process go as smoothly as possible.
  3. Set up a good future – Establish new credit with a secured credit card. This tip shows up on everyone’s “how to build credit” list because it is the number one way to build or improve your credit health. Secured credit cards are perfect for poor credit consumers because they typically don’t require a credit check. Secured cards are “secured” by your security deposit of at least $200. If you neglect to pay a monthly payment, your deposit will cover it and safeguard you against any derogatory marks. You establish positive, on-time payment history. Maintain payments and keep credit utilization under 30% of your total limit – these are the essential building blocks of credit that will vastly help your credit.

CK Bootcamp Tip: Poor credit isn’t a lost cause, so start now to deal with the past, present, and future of your credit health. For most consumers, doing the above can lead to a 100-150 point increase in 3-6 months.



Credit Karma Bootcamp: Your 31-Day Credit Health Plan

Throughout October, Credit Karma Bootcamp gives you daily information on what you need to make wise, credit-savvy decisions when it comes to credit cards, mortgages, insurance, loans, and most importantly, ALL THINGS CREDIT.

Follow along to get financially fit and credit healthy.


Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.


  1. on tweetchat

    Amy Fidelis at 12:48 pm on October 27, 2011
  2. Great article and so encouraging as well!! Thank you for being in the solution because their seems to be so much gloom and doom when it relates to bad credit these days. I really did not have any idea at all that secured credit cards could be so helpful when it comes to restoring credit. This will be another helpful tool in my credit repair endeavor, so thanks again.

    Alex at 8:22 am on April 2, 2013
  3. I was recommended this website by my cousin. I am not sure whether this post is
    written by him as nobody else know such detailed about my trouble.
    You are incredible! Thanks!

    Very Bad credit loans at 4:36 am on April 18, 2013
  4. Fantastic site you have here but I was curious if you knew of any message boards that cover
    the same topics discussed here? I’d really like to be a part of group where I can get responses from other knowledgeable individuals that share the same interest. If you have any suggestions, please let me know. Appreciate it!

    Iris at 2:26 pm on April 25, 2013
  5. Jenna

    Hi Iris! I’d recommend checking out our Advice and Learning Center, which is like a forum for people to ask and answer financial questions. Hope that helps!

    Jenna at 10:39 am on April 26, 2013

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