When was the last time you checked your credit score? Was it excellent or was it poor? Some people may have an excellent credit score throughout their life and then suddenly something in their life changes and the end result is that they are left with a bad credit score.

A death, a divorce, a failed business, a catastrophe such as a major flood or hurricane; any one of this things can dramatically change your personal finances.

So what can you do if you are suddenly left with a bad credit score?

Here are some tips on how to deal with it.

Tips on How to Deal with a Bad Credit Score

Deal With Existing Debts

Contact the financial institutions that you currently owe money and talk to them about creating a payment plan that fits within your budget so that you can repay what you owe, within a timeframe that you can manage.

Always be polite and professional.

If the first person you speak with is not willing to help you, ask to speak with a manager. Make it clear to them that you want to repay the money and accept full responsibility, but that you need some help on their part to make this happen.

Look for Mistakes

Dispute any inaccurate information on your credit report that may be reducing your credit score.

It could be a credit card that you paid off last year, but was never reported.

Or it could be a loan that you paid off 10 years ago but was never reported.

Make sure all of the details on your credit report are up-to-date.

Credit Counselling

Depending on your situation, you may find it beneficial to speak with a reputable consumer credit counselor about your bad credit.

Sometimes we are so frustrated by our situation that we just can’t seem to find a way out on our own.

And sometimes our personal finances are not as bad as they appear to us.

A credit counsellor has experience with these situations, and they can review your finances and help you find solutions that you probably haven’t thought of.

Rebuild Your Credit History

Once you deal with your existing debt it is time to work on rebuilding your credit history and improve your credit score.

Keep in mind that this can and should be done while you are paying off your current outstanding debt.

As you know, the best way to improve your credit score is to show that you can borrow money and then make your monthly payments on time.

You can do this by applying for a secured credit card with your local bank, or by applying for a loan. Take out small loans and repay them on time.

Each time you do this the lender will file a report with your credit bureau to show that you are paying on time.

As long as you continue to pay off your existing debt on time, and repay your loans on time, your bad credit score will work its way up to excellent again.