What Is a Bad Credit Score and How to Fix It
By DebtShift · Updated May 2026 · 9 min read
You applied for something — a loan, an apartment, a credit card — and got rejected. Or you checked your score and the number staring back at you was lower than you expected. A bad credit score follows you everywhere. But it’s not permanent. Here’s exactly what it means and how to fix it.
What Counts as a Bad Credit Score in the US?
In the US, credit scores run from 300 to 850. The two main scoring models are FICO and VantageScore. Here’s how the ranges break down:
| Score Range | Rating | What It Means |
|---|---|---|
| 300–579 | Very Poor | Most applications rejected |
| 580–669 | Fair | Approved but high rates |
| 670–739 | Good | Most lenders approve |
| 740–799 | Very Good | Better rates available |
| 800–850 | Exceptional | Best rates on everything |
Below 580 is considered bad credit. Between 580 and 669 is fair — you can get approved for things but you’ll pay significantly more in interest than someone with a 720+ score.
What Does a Bad Credit Score Actually Cost You?
This is the part most people don’t calculate. A bad credit score isn’t just an embarrassing number — it costs you real money.
Auto Loan — $25,000 over 5 years
Good credit (720+): ~6% APR = $466/month. Bad credit (580): ~15% APR = $594/month. That’s $7,680 extra over the loan.
Credit Card — $5,000 balance
Good credit: 18% APR. Bad credit: 28% APR. That’s hundreds more in interest every single year.
Apartment rental
Many landlords reject applicants below 620. Others require a larger security deposit. Bad credit can make finding housing genuinely harder.
What Causes a Bad Credit Score?
Your FICO score is built from five factors. Knowing which ones hurt you is the first step to fixing them:
- Payment history (35%) — One missed payment can drop your score 60-110 points. Late payments stay on your report for 7 years.
- Credit utilisation (30%) — Using more than 30% of your available credit hurts your score. Above 50% hurts it badly.
- Length of credit history (15%) — Short credit history or closing old accounts lowers your score.
- Credit mix (10%) — Only having one type of credit (eg all credit cards) limits your score ceiling.
- New credit (10%) — Applying for multiple accounts in a short time creates hard inquiries that temporarily drop your score.
How to Fix a Bad Credit Score — Step by Step
There’s no overnight fix. But these steps done consistently will move your score 50-100+ points within 6-12 months.
Step 1 — Check Your Credit Report for Errors
Get your free report from annualcreditreport.com. 1 in 5 Americans has an error on their credit report. A wrong late payment or account that isn’t yours can be disputed and removed — which immediately boosts your score.
Step 2 — Never Miss a Payment Again
Payment history is 35% of your score. Set up autopay for at least the minimum on every account. One missed payment can undo months of progress. This is the single most important thing you can do.
Step 3 — Get Utilisation Below 30%
If your credit card limit is $1,000 you should carry no more than $300 on it. Paying down balances below 30% utilisation is one of the fastest ways to see a score jump — sometimes within one billing cycle.
Step 4 — Become an Authorised User
Ask a family member or trusted friend with good credit to add you as an authorised user on their card. Their positive payment history gets added to your credit file. You don’t even need to use the card.
Step 5 — Get a Secured Credit Card
If you have no active credit or all accounts are in collections, a secured card is your starting point. You deposit $200-500 as collateral. Use it for small purchases and pay it in full every month. After 6-12 months of on-time payments your score starts moving.
Step 6 — Don’t Close Old Accounts
Even if you don’t use an old card, closing it reduces your available credit (pushing utilisation up) and shortens your credit history. Keep old accounts open with a small recurring charge if possible.
Want a month-by-month plan to fix your credit score?
Our free AI Credit Score Roadmap builds your personalised recovery plan based on your actual score and situation.
Get My Free Credit Roadmap →How Long Does It Take to Fix a Bad Credit Score?
Depends on what’s causing the damage. Here’s a realistic timeline:
- High utilisation — Pay it down and you can see improvement in 30-60 days
- Errors removed — Dispute resolved in 30-45 days, score improves immediately
- Missed payments — Stay current for 12-24 months and the impact fades significantly
- Collections accounts — 7 years to fall off but their impact reduces over time as positive history builds
- Bankruptcy — Chapter 7 stays 10 years but scores can recover to 680+ within 2-3 years with the right habits
Most people with fair or bad credit can reach 680-700 within 12-18 months of consistent on-time payments and lower utilisation. Read more: How Long Does It Take to Build Credit in the US?
What About Credit Repair Companies?
Avoid them. Credit repair companies charge $50-150 a month to do things you can do yourself for free. They dispute errors on your behalf — but you can file disputes directly with Equifax, Experian and TransUnion at no cost.
No company can legally remove accurate negative information from your credit report. Anyone promising to “erase” your bad credit history is lying. Save your money and use it to pay down debt instead.
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Frequently Asked Questions
What credit score is considered bad in the US?
A FICO score below 580 is considered very poor. Between 580 and 669 is fair. Most lenders consider anything below 670 as subprime — meaning you’ll pay higher interest rates or face rejection on applications.
Can I fix a bad credit score quickly?
The fastest wins are paying down credit card balances below 30% utilisation (can improve score in 30 days) and disputing errors on your report (resolved in 30-45 days). Rebuilding from serious damage like missed payments or collections takes 12-24 months of consistent behaviour.
How many points can my credit score go up in a month?
If you pay down a high balance or get an error removed you can see 20-50 points in a single month. Major improvements from consistent on-time payments typically show 5-15 points per month over 6-12 months.
Does paying off debt improve a bad credit score?
Yes — especially if it reduces your credit utilisation below 30%. Paying off a collection account has limited impact on older scoring models but can help with newer FICO versions. Read more in our full guide: Does Paying Off Debt Improve Your Credit Score?
Will a bad credit score ever go away?
Most negative marks — late payments, collections, defaults — fall off your credit report after 7 years. Chapter 7 bankruptcy stays for 10 years. But their impact on your score reduces significantly over time as you build positive history on top of them.
Know exactly what’s hurting your score and how to fix it
Free AI Credit Score Roadmap — personalised to your score and situation. No signup needed.
Get My Free Credit Roadmap →DebtShift is not a licensed financial advisor. This content is for informational purposes only. For free debt support contact the NFCC at nfcc.org.