Credit Score Recovery

Your credit score can impact your life in ways that seem to have nothing to do with your finances, from your ability to rent a home to getting a job. If your credit score is suffering from the effects of a bad economy, or just poor money management, get on the road to recovery by improving your score.

Credit Reports

Before you can begin to improve your credit score, it's imperative to find out just what's on your credit report, which determines your score. Be prepared to dispute erroneous entries.

"Keeping your credit report a true reflection of you is--like it or not--your job," writes Bankrate's Dani M. Arthur. "Get ready to clean and polish. Carefully look for errors [such as] outdated and incomplete information and inaccurate account histories. You'll want to make a thorough list of items you dispute and the reasons why."

Payments

The best way to re-establish your credit is to pay your bills, and pay them on time.

"Mailing a payment a few days late normally won't hurt your score, although you may incur late fees and trigger higher interest rates. The big hurt comes when you miss a payment cycle entirely," say's MSN Money's Liz Pulliam Weston.

Pay bills on time, every time. If you are experiencing financial difficulty, and are having trouble making your payments, Arthur recommends that you "call your creditors and negotiate to keep your accounts current and from being reported as delinquent or 'bad debt.' You can ask for reduced monthly payments or even change due dates to balance out your monthly bills."

The bottom line is, nothing improves your credit score as much as establishing that you pay your bills.

New Credit

Recovering your credit score means demonstrating to creditors that you are serious about getting back on the right track financially. That means refraining from seeking new credit.

Arthur explains, "credit bureaus look at how many new accounts you've opened, and the number of 'inquiries' for new accounts that are listed. A sudden flurry of 'inquiries' results in a lower [credit] score because many times consumers anticipating money problems increase their credit lines."

Credit Cards

Using the credit you have wisely is another way to improve your credit score. If you have--and use--several credit cards, then you must examine how you use them.

"Using 100 percent of your limit on any credit card puts you at risk of over-limit fees. It also takes a bite out of your credit score," says Weston.

Pay down credit card balances and refrain from mounting new credit card debt, and you'll see the difference both in your wallet and in your credit score.

Considerations

Rebuilding your credit score will not happen over night. Weston's recommendations to "pay your bills on time, all the time, and reduce your credit utilization" as two of the top ways to improve your credit score are excellent strategies, but will take time. Expect to spend at least a year working toward establishing good credit again to see a significant increase in your credit score.