Do you have a poor credit rating? If so, it can have a dramatic effect on your life. You will find it harder to borrow more money, and you may not be able to get access to everyday things in life such as a contract mobile phone. It may also mean you are restricted with where you can live – many landlords run credit checks to ensure their tenants have the ability to pay their rent.

If you’re struggling, however, then try not to panic. There is a way out. Follow this six-step guide and you should be able to start repairing your credit rating and become a more viable customer for lenders.

Identify your debts & arrange repayments

The first thing to do is identify your debts. Sign up to one of the major credit reference agencies and get access your report. It will show you your score and where your problems lie. Make sure there are no mistakes in your file, and if there are, be prepared to dispute them. The sign of a responsible borrower is that they repay their debts on time. If you have a bad credit score, it probably means you have fallen behind with your repayments, so be sure to contact your lender to arrange a repayment schedule. Don’t be bullied into agreeing an unrealistic amount, but make sure you meet the terms of your agreement.

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Target expensive debts first

Make yourself aware of your most expensive debts and put the majority of your repayment fund into attacking them. Look for the amount of interest that is charged rather than the size of the debt itself and focus on the debts that are causing you problems in your report. The sooner you start paying these off, the quicker you will repair your rating.

Borrow more sensibly

Even though you have bad credit, you may still have a modicum of borrowing power. Although your rating is low, every time you pay something back on time, it will receive a boost. Only borrow what you need, however, as now isn’t the time to start racking up needless debt. For example, it might be necessary for you to buy a new car because you live in a remote location. In which case, take a look around at a few online car loans to see if you can find a firm that will take you on with a bad rating. You will have to pay more interest than a borrower with a perfect credit score, but as long as you can afford the repayments you will find your credit score goes up.

Don’t make too many applications

Although you still have credit options available with a bad report, you will do damage if you make too many applications. Every time a search is made on your file, it leaves a fingerprint – and too many fingerprints can damage your score. With this in mind, you have to be sensible about what you apply for – and that includes things like smartphone contracts.

We hope this has helped you feel a little better about your low credit score. Although it will take some time to fix completely, it can be done – and results can start to occur surprisingly quickly. We wish you all the best.