The bank reports some information to the credit bureaus once you take a loan or once you take a credit card. they report both about your payment history and the amount of credit. Public records, medical bills, and utilities are some of the things that appear on the credit report. So the credit bureaus will use the information from all the sources and calculate your credit score. The score the credit bureaus give is a three digit number and ranges from 300 to 850. After getting the range you are scored as either excellent, good, fair, poor or bad. There is a general rule that states that any score below 650 can be either poor or bad. scores with such a range make it difficult for you to get credit from any source. You can, however, fix the score.
To fix your credit, you have to first fix your score. There are monthly bills that most of us cannot change like mortgage, car payments among others. You will find that most people end up spending their money on things that they can spend lesser or even stay without. One of the ways to cut your spending is cooking at home. Eating outside your home increases your expenses. Avoid all the useless subscriptions. once you trim on the expenses, you will have more money to use on your debts and bills.
the second thing you do is updating your payments. Payments are an important aspect for your credit scores. Occasional late payment does not kill your score but late payments cause a lot of damage. People who are able to handle their payments financially, they can get them on the late accounts current. However, if you cannot get them all current at the same time, aim to pay down the account that is most overdue. If you focus on paying on time, your payment history improves and brings the score up.
Reduce your credit card debt. People make assumptions that they are fine as long as they stay under their credit limits but unfortunately, the credit bureaus see it in a different way. always resolve your debt in a collection since the credit bureaus dislike the accounts that are in a collection.
If you realize that your financial situation is messy and all the forward steps you make trigger new problems, it is important that you get outside help. If you are not able to get things under control on your own, get a credit repair company. The credit repair company will always negotiate for better terms on your behalf.
This page has more info about credit scores.