 TITLE: What Is a Bad Credit Score? CONTENT: How a Poor Credit Score Can Affect You\n--------------------------------------\nHaving a bad—or low—credit score can affect you in several ways:\n*   **Higher interest rates**: Because lenders see those with bad credit as a higher risk, they'll charge interest rates accordingly. Having a poor credit score will result in a higher interest rate on your home mortgage, for example, which can cost you tens of thousands of dollars over the life of the loan.\n*   **Trouble getting a mortgage**: Mortgages are very large loans, so understandably, lenders want to be confident you will not default on them. While some will simply charge higher interest rates, others may reject your application altogether.\n*   **Risk of being denied credit**: Lenders are more likely to reject your loan application if you have a history of managing credit poorly.\n*   **Difficulty getting approved for an apartment or cellphone contract**: Again, it all comes back to risk. Providers don't want to lose money by taking on a risky customer.\n*   **Risk of being turned down for a job**: While employers can't access your credit score, they can request your credit report, and having negative information there could put you at risk for being turned down for a job. That's particularly the case for positions that have financial responsibilities.\n*   **Difficulty obtaining a small business loan**: If you run a small business, having poor credit could make it difficult or impossible to borrow money to help your company.\nFinally, those with bad credit will likely have difficulty obtaining a conventional car loan and may have to utilize alternative, and more expensive, financing options.  \nHow to Improve Bad Credit\n-------------------------\nThere is not a simple answer to this question because every person's situation is unique. But under most circumstances, if your scores are low but you start to take some positive action, you can see results in about two to three months. Here are some ways to improve your credit scores:\n1.  First, check your credit score to see where it actually is. Experian offers you a free FICO® Score so you can see how you might look to a lender.\n2.  Pay all of your bills on time. Your payment history is the most important factor in your FICO® Score, so making sure you pay all of your bills on time should be the highest priority. Try setting up automatic payments and payment reminders to help you to avoid late payments.\n3.  Pay down revolving debt such as credit cards. This decreases your credit utilization rate and could help your scores.\n4.  Become an authorized user on a family member's credit card. You will have to find a trusted partner for this, as the account owner is responsible for paying the bill for this account.\n5.  Get a secured credit card. A secured credit card requires you to deposit money into an account which is used as collateral for a credit card and typically serves as your credit limit. The benefit for you is that most secured cards report your payment history to the three national credit reporting agencies—Experian, Equifax and TransUnion (confirm this with the card issuer when you're researching secured cards). If you maintain a positive payment history, this account will help you build your credit history and likely improve your credit score.\n6.  Try Experian Boost™† . This free program can help improve your FICO® Score by allowing you to add positive payment information from the utility and telecom bills you pay every month to your credit report, often immediately boosting your scores.\n7.  Apply for a short-term loan. A short-term loan is an unsecured loan that typically needs to be paid back in less than a year. Short-term personal loans are available in a variety of packages, and the devil is in the details with payment terms. Read agreements carefully.\n8.  Apply for a credit-builder personal loan. A personal loan is an installment loan that typically has a lower interest rate than credit cards and can help you make a big purchase or it can be used to consolidate multiple credit card debts into a single, lower-cost monthly payment. A credit builder personal loan requires a refundable security deposit.\n9.  Try to fix errors in your credit report. If there is fraudulent or inaccurate information on your credit report, then you can dispute it with the credit bureaus.\nThe Bottom Line\n---------------\nHaving bad credit presents serious problems with your personal finances, so it's important to know your credit report and credit score. Thankfully, there are many steps you can take to improve your credit, and you can start to see results within just a few months. By taking the time to understand how credit scores work, and what causes bad credit, you can manage your credit responsibly and enjoy additional financial opportunities as you improve your credit score. END