The Best Ways to Fix Bad Credit

by Theresa Pickett ; Updated July 27, 2017
Be careful not to go over your budget when you charge things.

If you are one of the many Americans suffering from bad credit in this economy, you need a legitimate, proven method to fix your credit. Although improving your credit might take some time, it is possible. You should not give up on improving your credit; begin by making minimum payments on time.

Raise Your Income

If you have bad credit, you can begin to fix it by pursuing a higher income. Pick up side jobs, and pursue that raise. When the credit bureaus calculate your credit score, they take into account what your income is. Having a higher income demonstrates that you have the ability to make payments on loans and mortgages. It also can help you begin to pay off your credit cards, which can help you improve your credit score, too. Make sure not to live more extravagantly when you have a higher income. Continue to live under the same budget you had before, and put more money towards your debt.

Use the Snowball Plan

Now that you have a larger income, make a plan to distribute your paycheck to each credit card company. According to Dave Ramsey's article, "Get out of Debt with the Debt Snowball Plan," paying off your smallest debt is ideal while you continue to make only the minimum payment on your other credit cards. Take the extra money that you would have spent on the other cards, and put it on your smallest debt. Eventually, you should pay off your smallest debt completely. Continue with your next smallest debt, and the next, until you have tackled all of your credit cards.

Never Miss a Payment

When you finish your snowballs, you might continue using your credit cards. Although using cash is ideal, having a credit card for major purchases will not be a problem until you start missing payments. Missing a payment creates penalty fees and might raise your interest rate, too. Avoid spending more than you can afford to each month to keep from missing payments. If you need to make a major purchase, calculate how much you can afford to spend each month to make the payments and factor in the interest rate that will be added to your bill. Then consider whether the item is worth buying.

About the Author

Theresa Pickett has written since 2007. She graduated from Flagler College with a Bachelor of Arts in history and Vanderbilt University with a Master of Education in elementary education. As a certified teacher who earned the ETS Recognition of Excellence for Praxis II Elementary Education, she has been published in "Student Filmmakers Magazine" and "Model Life Magazine."

Photo Credits

  • credit card and hand image by Warren Millar from