If your Credit score is 524, you have “Very Poor” or “Poor” credit, according to the FICO and VantageScore credit score models, respectively.

With a score of 524, you are in the bottom tier of the FICO scoring model and will continue to have bad credit unless you improve your score. This should be imperative at this point, as operating with bad credit can be crippling.

Use the information below to help better understand why your score is at 524. This is an essential first step in fixing damaged credit. From there, you can decide how to take action to boost your score with the goal of eventually tapping into the many benefits that come with maintaining good credit.

Why Your Credit Score Is 524

It’s difficult to fix something if you don’t understand how or why it’s broken. With that in mind, review the following factors that can significantly impact your credit score.

Each score is unique to the individual to which it belongs. This is because your credit score is a one-of-a-kind combination of your good and bad financial decisions. That said, as you go over each category, consider how your own particular behavior has either hurt or helped your score in the past.

Payment History and Credit Utilization

Two of the most important factors that impact your credit score are your payment history and credit utilization.

Payment history is just as it sounds. It reflects your track record when it comes to making payments on borrowed funds. Do you pay on time? Do you pay in full? Do you miss payments regularly or allow accounts to default? This is important, as your payment history can make up as over a third of your total credit score.

Your credit utilization is the amount of your available credit that you’re currently utilizing. So, if you have $10,000 available to borrow and you’ve borrowed $6,000, your credit utilization ratio is 60%. When the number reaches more than 30% per account, it can begin to hurt your credit score.

Your Debt and Credit Age/Mix

The total amount of non-revolving debt — that is, single-event debts like an auto loan or mortgage — that you owe can impact your score. If your total debt is too high, it reduces your credit score.

In addition, if the average age of your debt is too young, it can also lower your score. This may even impact the score of older individuals if they open up multiple new lines of credit around the same time.

Consider how many different kinds of credit you are currently utilizing. If you only have one or two active lines of credit, it can restrict your score’s ability to improve. However, if you show that you can responsibly manage multiple kinds of credit, such as a personal loan, credit cards, and a mortgage, it could boost your score.

Hard Inquiries and Derogatory Marks

If you open a new line of credit, the lender may conduct a hard credit check. This can temporarily reduce your score, but not for more than a year. As long as you don’t have too many hard inquiries too close to each other, this shouldn’t be a problem for your long-term credit.

Derogatory marks, however, are something to be concerned about. These are items that show up on your credit report if you default on a loan, declare bankruptcy, suffer through a foreclosure or repossession, or have a collection agency make a claim against you. These are very damaging events that can linger on your credit report for years at a time.

What Can You Do With a 524 Credit Score?

If you have bad credit, it’s very difficult to qualify for many borrowing opportunities. For instance, bad credit can immobilize your financial ability to function by:

• Leading to automatic denial when you apply for a loan.
• Being charged exorbitantly high interest rates.
• Having to pay additional security deposits.
• Needing to provide proof of income, get a cosigner, or meet other additional qualifications.

However, if you’re able to improve your credit, it can open up the doors to a variety of different financial activities. For example, with better credit you can:

• Get approved for personal loans and a mortgage without difficulty or the need to go to lenders who specifically focus on bad-credit loans.
• Reduce the amount of money you’re spending with lower interest and fewer security deposits.
• Gain access to higher credit limits and perks on your credit cards.
• Avoid the need for cosigners, proof of income, and other qualifications.

Your score may have suffered in the past. However, that doesn’t mean you’re stuck with bad credit for life. There are many ways to improve your credit score in the future.

How to Repair a 524 Credit Score

At this point, you should have a solid idea of how your credit score managed to drop so low. Rather than beating yourself up for your past mistakes or giving into a victim mentality due to the actions of others, it’s time to take your financial status into your own hands.

Use the recommendations below to create your own credit repair plan that suits your particular situation. Specific things to address include:

• Payments:Make all of your payments on time, as your payment history make up 35% of your total credit score.
• Existing debt:Pay down all of your outstanding balances and reduce your debt wherever possible.
• Revolving credit: Continue to use your revolving credit responsibly to build a positive credit history moving forward.
• Credit reports: Review your credit report each year and dispute errors and address derogatory marks whenever you find them.
• Budget: Create and stick to a budget in order to form positive and healthy new financial habits.
• Professional help: If you find the repair process too much to handle, contact a good credit repair company to help.

Once you’ve created a plan unique to your own situation, implement that strategy in the name of building a brighter financial future for you and your loved ones.

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