We’ve all made a few bad choices in life. Sometimes, those bad choices affect your credit score. This doesn’t have to completely stop you in your tracks, however. So, how do you get back on your feet when your credit score has taken a serious hit?

Most of us become more aware of our credit ratings when we need more money. Specifically, our credit ratings tend to come up when we want to make a major purchase, such as a home or vehicle purchase. These kinds of purchases usually require a loan and securing a good loan requires a good credit score.

All lenders will want to check your credit score. This does not necessarily mean that those with low scores will never get a loan, however. Some lenders will take a risk on someone with bad credit. However, these situations almost always come with a hefty interest rate attached and lead to much higher payments over time.

One thing that many people don’t realize is that each time you apply for a loan, it can further negatively impact your credit rating. When you apply, the lender will run a credit check. This is standard procedure because, of course, no one wants to lend money if they are statistically unlikely to get it back. These credit checks are called “enquiries”. Each time an enquiry is made, the enquiry is registered with credit companies. If you make several enquiries in a short time span, it is seen as a red flag that you might be in dire financial straits. Similarly, if you are making enquiries on credit cards or other similar loans, this is seen as risky. Thus, your credit score will sink.

How to Improve Your Credit Score

If you have a low credit score, there are things you can do to remedy the situation. First, stop the flow! It is important not to rashly seek more lines of credit which would lead to many additional enquiries.

Next, become familiar with your credit report. Examine it closely to make certain that nothing has been reported in error. If you notice questionable entries, follow up with these right away. When you have default situations on your report, contact the creditors and try to negotiate a deal. Many will be open to making arrangements with you because they would rather get some money than none. Ask if you can arrange a hardship payment plan or something similar in exchange for them removing their claim from your record.

Now, it is time to start rebuilding. One of the best things you can do to increase a low credit score is to consistently pay your bills on time. While you should ideally pay all bills on time, this is especially important with your recurring bills. Make certain that your credit cards bills, rent and utilities are never late. Ever.

Finally, while you don’t want to increase your debt, it is important to have active credit. This means something like a credit card that you use consistently and responsibly. When creditors see that you have credit and make payments on it each and every month, that looks great. It can take time to repair low credit, but it can be done. With patience and consistency, you are on your way.