A person is considered to have bad credit if they have a history of not paying their bills on time or owe too much money. Bad credit is often reflected as a low credit score, typically under 580 on a scale of 300 to 850. People with bad credit will find it harder to get a loan or obtain a credit card.

How can people have low credit scores even if they pay bills on time?

A single payment that is 30 days late or more can send your score plummeting because on-time payments are the biggest factor in your credit score. Worse, late payments stay on your credit report for up to seven years. The impact of a payment mishap fades with time, though.

Can you use a credit card if you have bad credit?

Many people swear off credit cards after bad credit fearing that new credit cards will only get them in trouble again. However, avoiding credit card makes it more difficult to rebuild your credit. Using a credit card the right way will help you establish a positive payment history and put you on track to building a better credit score.

What should you avoid when trying to rebuild your credit?

These credit cards often have high interest rates and extremely high fees that make credit unaffordable. A lot of people find themselves right back in debt with damaged credit after trying to rebuild with one of these types of credit cards. You should also avoid prepaid credit cards as a means to rebuild bad credit.

What can you do if your credit score is bad?

If you improve your credit score from bad to fair a host of debt relief options open up before you. Payment history: Missing payments is the surest way to damage your credit score. This accounts for 35% of your score.

Is there a way to get out of debt with bad credit?

Currently, there are no recommended “get out of debt in a day” hotlines to call for help. However, there are always steps you can take to get out of debt no matter how bad your credit score is. Here are a few options to consider.