Q&A: Wondering why your credit score is bad? Here’s how to make it better

Dear Liz: I am trying to get my credit score figured out and was wondering if you have any recommendations for a credit report guru in my area? I need someone to walk me through why my score isn’t higher and to help me resolve that issue.

Answer: Unfortunately, many credit repair companies are scams. Even those that are legitimate are essentially selling you something you can do on your own, for free.

Understand first that you don’t have just one credit score: You have many, and they change all the time based on the information in your credit reports. Consider signing up for a service that provides you a free score that you can monitor over time. That can help you understand what behaviors help and hurt your credit. These services also typically give you reasons why your score isn’t higher. (You may be able to get a free credit score from your bank or a credit card issuer. If not, many sites online provide free scores.)

Next, get all three of your credit reports for free from AnnualCreditReport.com. (Type the address into your browser rather than using a search engine, since there are many look-alike sites. If you’re asked for a credit card, you’re on the wrong site.)

Look for obvious problems, such as accounts you don’t recognize or late payments being reported when you paid on time. Dispute incorrect information, using the links provided. Negative information that is correct can typically stay on your credit reports for seven years, although the impact on your scores should diminish over time.

In general, you can improve your scores by paying bills on time, using 10% or less of your available credit limits and having a mix of credit types (credit cards and installment loans). If you’re starting from scratch or trying to improve bad scores, consider a credit-builder loan from a local credit union or an online lender.