But with patience and discipline, you can move that score from the depths to the stratosphere.
We talked to several people across the country who dug themselves out and brought up their credit scores in a big way — sometimes in just one or two years.
We asked them to pass along their best tips to share with folks who might be dealing with the low-score blues.
Credit score before: 348
Credit score after: 702
Tips for Maintaining a Good Credit Score
Credit score danger zone
Rock bottom: After getting divorced, Chinwah, an office manager, was shocked to find that her credit score had sunk to an average of 348, with the lowest reported score among the three bureaus at just 316. There were 43 collections and a repossessed car on her report — "Not one thing was positive, except for my student loan," she said. "I started to look for housing for me and my two small children and no one would even look at me."
Turning point: Melissa started researching the ins and outs of her credit report on the forums at MyFICO.com, where people shared their tips for raising their credit scores. For example, she learned that being 120 days late on a payment is basically the same as being repossessed, according to a credit bureau. "The average layperson doesn't know these kinds of things," she said.
Her motivation: "The motivation was I needed a place to live," she said. "I was 44 years old at the time, and I had to start all over anyway." When Melissa's credit score reached 648, she applied for a mortgage and bought her dream house.
Lessons learned: Melissa approached building her credit like a part-time job. "Every day I would promise myself I would look at my score on my lunch break, and I would make myself do something, like write a goodwill letter," she said. Melissa wrote a lot of letters and made phone calls to lenders after paying her debts, asking them to remove blemishes from her report. She was persistent in her efforts over the course of two years and was successful in getting at least 15 collections removed.
Her best advice: "Patience is one thing you must have," she said. "There's no magic pill, no magic wand. You have to sit down, make those phone calls and pay your bills."
Credit score before: Less than 500
Credit score after: 785
Rock bottom: "I got out of graduate school in 1998. By 1999 and 2000, paying bills on time wasn't that important to me, so they'd pile up," said Seago. "And I'd be 30 days late or 60, sometimes 90. A couple of those piled up. All the sudden I thought, ‘Look, I'm going to want to buy a car someday, get married and buy a house.' I couldn't do those kinds of things with the score I had."
Turning point: "One of the first things I did was start paying everything on time," said Seago, president of the Apopka Area Chamber of Commerce. "I set up a auto bill pay so I'd never be late again. The easiest thing to do is start paying your bills on time. The late payments came off eventually. Then I'd pay extra on my bills — more than the minimum — so my debt ratio would go down. I got rid of all my store cards and kept all my major credit cards."
His motivation: "I just buckled down and wanted to get [my score] turned around," he said. "At some point, I'd be married and looking at a house, and I could just see that played out someday, sitting down with a mortgage broker looking at my credit and [the broker] saying, ‘Yeah, you can't have a house.' I probably looked at my score every four months, and I'd see it go up. It's like when you're dieting and you see yourself losing a bit of weight." Seago is now married and in the process of looking for a house.
Lessons learned: Seago researched credit score advice online and in magazines. His major focus was on making payments on time. "If you find yourself in trouble and you've got a low score, you can't spend your way out of it," he said.
His best advice: "No. 1, as simple as it sounds, is just pay on time. Pay a little bit extra every month to get that balance down. And don't get any more cards. Do whatever you've got to do to pay them off and keep your balances down."
Baton Rouge, La.
Rock bottom: She knows she's got a long way to go before her credit score can be called excellent, but she also sees that she's come a long way from when things were their darkest. "When I first went to college, everyone was offering me credit cards," said James. "A few years later, I was getting behind on bills and not being able to afford certain things and taking out loans. I went to get a vehicle in 2008 and realized my credit score was way low."
Turning point: James started following the advice in the book "Good Debt Riches," by Elon Bomani. She had a lot of cards with small amounts of debt and began paying those off, slowly working on lowering her debt.
Her motivation: James was motivated by her need to get reliable transportation so she could work at her two jobs. "I went for six months without a vehicle," she said. "It was actually quite difficult."
Lessons learned: "I applied some of the basic principles of paying off creditors where I had a small balance, then began to work out payment arrangements with other creditors," she said. "I also invested in a secured credit card that reported to all three major credit bureaus and made sure to pay them on time and off each month."
And though she's managed to lift her score nearly 100 points, she knows that her work isn't nearly done. "Each day, I am still working towards repairing and rebuilding my credit as well as becoming financially sound," she said.
Her best advice: "I would honestly have to say first and foremost to have faith that you can do it," she said. "The end results are far greater than what you're dealing with at that particular time."
Tips from the top
We also talked with David C. Jones, president of the Association of Independent Consumer Credit Counseling Agencies, and Gail Cunningham, vice president of public relations for the National Foundation for Credit Counseling, to get their best tips for building credit.
Here's what they had to say.
* Check credit reports regularly. At least once per year or three months in advance of applying for a loan or credit, check your reports, which are free annually through AnnualCreditReport.com. "Dispute any incorrect entries," Cunningham said. "Make sure it's about you and only you."
* Pay on time. It seems simple, but paying on time is the highest weighted component of your credit score, accounting for 35 percent of the score, according to Cunningham. "If you're a procrastinator, unorganized or if you travel for work, set up automatic bill pay in an amount that will at least pay your minimum [payment] by the due date," she said.
* Don't max out your credit. Aim to use no more than 30 percent of your available credit to avoid costly fees and being put into a risk category. It's also a good idea to pay down your cards. "As your cards are paid down, it is likely that you will see an improvement in your credit score, as the computation takes into account your ability to repay your debt more easily," said Jones.
* Be careful about closing unused accounts. Have a few credit cards paid off that you don't want to use anymore? You might be better off keeping them open. "Closing unused accounts will lower your overall available credit and negatively impact your credit utilization ratio," explained Cunningham.
* Resist paying for everything on credit. "Chances are that using cash more often will make you a better steward of the money you have each month after paying necessary bills," Jones said. "As your spending patterns improve, so will your credit score."