Having a positive credit history matters in many instances in life — like when you go to buy a house, apply for an auto loan or try to get a new credit card. Most financial decisions you make in your life will depend on keeping your credit scores as high as you can. Having bad credit may affect the interest rates you receive or your approval likelihood for loans. If you’re in this situation, all is not lost. There are many steps you can take to improve your credit scores and get yourself out of the “bad” range. Take a look at our highlights of what you can do if you have bad credit.

What is considered a bad credit score?

A credit score is a number between 300 and 850. There are many different types of credit scores, but the two most widely used are FICO and VantageScore. Ninety percent of lenders use FICO scores as opposed to other credit scores, but VantageScore has been growing in popularity. Anything under 580 on the FICO range is considered bad credit, and anything under 669 is fair.

The three major credit bureaus, Experian, Equifax and TransUnion, created VantageScore. The main difference between it and FICO is that VantageScore is tri-bureau. Instead of separating the three bureaus into three distinct scores like FICO, VantageScore compiles them into one. With VantageScore, anything under 599 is bad and anything under 699 is poor or fair. A potential lender may look at any of these scores to judge your creditworthiness.

Options for rebuilding your credit score

One way to improve your credit is to look into credit cards for bad credit. Otherwise known as secured cards, these provide an excellent path for anyone with poor scores to regain a hold of their creditworthiness. A secured card typically requires a cash deposit that becomes your credit limit. By putting down a deposit, you’re lessening the risk for the card provider because they can pull from the deposit if you fail to make a payment. However, if you continue to make frequent payments on your secured card, you can receive credit limit increases and eventually build up a healthier credit.

Your credit scores come from five categories: your payment history, the amount you owe, how long you have had credit, how much new credit you took out and what your mix of credit looks like. Of those, the two most important factors are your payment history and the amount you owe. Therefore, you must make on-time payments. Not missing payments will contribute significantly to your overall credit success. You can build up a good credit score over time if you pay by or before the due date. You’ll need to pay at least the minimum amount due every month, but you can always pay off more if that’s something you can manage. Paying off more than is due is never penalized, and is often a good idea as long as it doesn’t eat into your necessary funds.

Finally, you should keep a low balance. It’s vital that you don’t max out your credit cards because the balance amount on your cards counts toward your credit scores. Keeping the amount on your accounts low at all times ensures you can pay them off and also helps to boost your creditworthiness.

Tips for maintaining a solid credit score

Once you have a good credit score, you’ll want to take steps to keep it that way. In addition to paying on time and keeping your balances low, there are several things you can keep in mind that will help you maintain a good credit score. First, try to keep balances on only one card at a time. It doesn’t matter how much of a balance you hold per card — if it says on your report that your balance is spread out between multiple cards, that will count against you. Even if one of the cards has $40 and the other has $100, it could ding your score.

Next, don’t close old accounts. Even if you have a credit card account with a high interest rate that you have no intention of using again, keep the account around. Put the card away somewhere so you aren’t tempted to use it, or cut it up if you’re sure you won’t need it. As long as you use it once every so often, like once per year, the account will remain open and will count toward your credit history. A longer credit history boosts your credit score.

Although the different credit scores can be a bit confusing, the most crucial consideration is the information contained in your credit report. This is the record that gives each of the credit score companies the information used to calculate your score. Thus, you need to make sure your credit report is accurate. Check your reports from all three bureaus frequently. Make sure no false information ends up on your credit reports, which could lower your different credit scores. If you see any inaccurate information, file a dispute with the credit bureau right away.

Bad credit can take a while to eradicate, but it’s not as difficult as it may seem. By making small, daily moves toward becoming more financially responsible, you can improve your credit score. Soon enough, your creditworthiness will be good enough that you’ll be able to qualify for any credit card or any loan you would like. Just remember to stay within your means once you get these new streams of income, and you’ll be on your way to maintaining excellent credit for life.