If you’re thinking of how to build credit with bad credit, you must first understand what good credit is. A credit score is a number that lies within the range of 300-850. Although there are more than a few scoring models, most believe that a score above 700 is good, and one above 800 is considered to be excellent.

Let’s look at how to build credit with bad credit:

• Pay your bills in time
  Your payment history is the biggest contributor and accounts for 35 percent of your FICO score. You can ensure a good score by clearing your dues in time. If forgetting to pay your bills on time is your problem, you can set up autopay on your card for all the recurring bills like loan installments and electricity bills. That said, if your score is poor, it will take a few billing cycles for you to see a change. So, be persistent until your score improves. If you’re unable to make payments on time, be upfront with your creditors. If you are in serious financial trouble, the credit card issuers might consider relaxing the amount of interest and not report a rare late payment to the credit bureaus. Further, if you’re sure that you will lag in a particular payment, connect with your creditor and work it out with them.
• Review your credit report
  You may not have defaulted at times, but your credit score may have gone lower because of an error made by a third-party. What can you do in such cases? Every year, you’re entitled to get one free credit report from all three credit reporting agencies, so review it properly and contact them to make any rectifications needed. This will automatically improve your credit score.
• Be careful with credit utilization
  Credit utilization is the credit percentage you are already using as against your total credit limit. This amount has a massive impact on your credit score, so ensure that your credit utilization ratio is 30 percent or lower. Check the credit utilization for all your cards, and try to bring it down if it is higher than 30 percent. When the rate is lower, your credit issuer will report the same to the credit bureaus, improving your reliability as a borrower and, in turn, boosting your credit score.
• Get an authorized user status
  If you want to build credit with bad credit, the simplest solution is to become an authorized user on a responsible user’s card. When you are an authorized user, you can improve your score without even using the primary cardholder’s credit card. You will benefit from their card activity and timely payments. That said, verify whether the card company is reporting this activity to the reporting agency.