If your credit score is 500, it falls in the category of “poor.” Poor credit can create challenges you may not have expected. Applications for credit cards or loans may be denied altogether, and if a lender is willing to approve your application for credit, the interest rate is likely to be high. A poor credit score may even impact your ability to get a job or lease an apartment. If your credit score is poor, you need to focus on bringing it up. How fast can you fix a 500 credit score?
What Caused Your Low Credit Score?
The amount of time it takes to fix a bad credit score depends on what caused it to be low in the first place. Was it an isolated incident or several mistakes? A single late payment that was more than 30 days late can damage your credit, but if it was an isolated incident, the impact will lessen over time as long as you don’t make any other payments late. In this case, with responsible credit use, your credit score should begin to go up within a year or two.
More serious problems can hurt your credit score for a longer period of time. Examples include accounts in collection, bankruptcy, and foreclosure. Bankruptcy stays on your credit report for seven to 10 years. Getting into debt by maxing out your credit cards hurts your credit, but your score should improve if you’re able to pay your credit cards down to less than 30 percent of the available credit.
Working on Improving Your Score
While it’s unlikely you can fix a 500 credit score quickly, as soon as you start taking action on building better credit habits, you’ll be closer to seeing your score start to go up. The most important action to take is to catch up on any past due bills and get in the habit of paying your bills on time. Setting up automatic payment is a good way to avoid the possibility of forgetting to make a payment.
Another habit to work on is to avoid borrowing more money than you can afford to pay back. Maxing out credit cards can make it difficult to make your payments. Work on paying down your total debt, and don’t use credit cards to make purchases unless you need to. Make a budget and stick to it, and consider a side hustle if you’re having trouble making ends meet.
Is Your Credit Report Accurate?
Even if you’ve made some credit missteps, it’s possible that your low credit score is at least partially caused by inaccurate information on your credit report. If you haven’t reviewed what’s on your credit report lately, it’s a good idea to do so. Look for wrong payment histories, wrong balances, accounts you don’t recognize, and negative items older than seven years that should have been removed. Dispute any errors you find right away.
For help with improving your credit score, get in touch with Dovly, an AI credit engine that can help you dispute any errors you find on your credit report. Try it risk-free with our free membership tier. Get in touch with Dovly today.