Don’t let bad credit ruin your life. Learn how to recover and rebuild your financial life in a few steps.

Realizing you have bad credit can be a tough moment, especially if it might delay your plans to borrow money for a major purchase like a car or home. The good news is that you can rebuild your credit over time by taking a few simple steps.

Although it can take anywhere from a few months to over a year in order to see a dramatic change in your credit score, depending on how bad your credit standing is, even incremental improvements can help show potential lenders that you’re committed to responsible credit management, according to Equifax, one of the three major credit bureaus.

Follow these guidelines, and watch your credit score begin to soar.

Pay Bills on Time

Payment history is the number one factor that influences your credit score, accounting for about 35 percent of it, notes myFICO. Even one late payment can send your score plummeting, while a solid record of consistent payments will help you maintain or grow your score. In short, be diligent about due dates.

Know Where You Stand

You might assume you have bad credit, but do you actually have an accurate picture? If you haven’t already, pull your credit report from each of the three major credit bureaus (Experian, Equifax, and TransUnion). You can do so for free once per year at AnnualCreditReport. These reports will show you what might be dragging down your score and even offer suggestions on how to get it back on track.

Fix Any Errors on Report

After requesting your reports, look them over carefully. There could be incorrect negative items that is hurting your overall status. If you see something that’s wrong, such as a late payment that you know was on time or an account you never opened (a sign of identity theft), get in touch with one of the bureaus immediately to investigate. The FTC website offers guidelines on how to dispute errors.

Pay Down Balances

If you are carrying a large balance on an account and you have the means to pay it off, go for it. Debt utilization, or the amount of credit you are using as compared to your available credit limit, is the second biggest factor comprising your credit score. So if you have a $5,000 credit limit and you owe $4,000, you have an 80 percent utilization. Experts say you should aim to keep that number below 30 percent, and as close to zero as possible to improve your credit standing.

Use Credit to Improve Credit

To prove that you’re credit-worthy, you’ll have to use credit responsibly. Charge a small amount each month on one or two credit cards, and pay it off in full as soon as the bill arrives. If you’re having trouble getting access to credit, you can look into applying for a secured card or asking someone with good credit to add you to their account as an authorized user.

Follow a Budget

Creating a financial plan that encourages you to live within your means will help you prevent future slip-ups. Find ways to limit your spending and set aside money in an emergency fund so you don’t have to rely on plastic to cover unexpected bills.

Bad credit doesn’t have to stay with you forever. Improving your credit is hard work and will take time, but once your score starts to climb, you will reap the rewards and have access to the best financial products and perks available.

Dawn Papandrea

About the AuthorDawn Papandrea

With more than 15 years of professional writing and editing experience, my writing specialties are in personal finance, higher education, and content marketing. Publishing credits include Family Circle, Parents,,,, University Business, and many more. In addition, I also create branded content for several brands and corporations in the financial, retail, marketing, and lifestyle/parenting spaces. No matter the medium, I understands the value and power of content from both a writer's and editor's perspective.