If you have bad credit, you're not alone. The bad economy these days, coupled with Americans getting into more and more credit card debt, has led to many people have been substandard credit scores. Nonetheless, you can restore a good credit score even if it's bad at present.

First of all, let's have a brief discussion on why you need a good credit score. Your credit score is an indicator of your overall financial health. There are many different types of credit scores out there, but the one most people pay attention to is something called the FICO score. All three major credit bureaus (Equifax, TransUnion, and Experian) use the FICO score on their credit reports.

You need a good credit score in order for lenders to be willing to lend you money, give you their preferred rates on loans, or to allow you to go into debt with them. This can mean getting a credit card or loan, or qualifying for a mortgage so that you can buy a house.

However, a good credit score is worth much more than that these days. Not only does a good credit score help qualify you with financial lenders, but it can also make or break the difference between getting a particular job or not getting it. Yes, that's right. Employers, too, use your credit score to help determine whether or not you're going to be a responsible employee. What this means is that if you've got a bad credit score, it's time for you to clean up your act.

Now, oftentimes, a bad credit score happens through no real fault of your own. You simply go through a bad financial time and fall behind on bills, or maybe you've had a health scare so that you are left holding excess medical bills.

Or maybe you have a bad credit score because you simply use credit cards unwisely or spend with abandon when you don't have the money. Are you someone who "tries to keep up with the Joneses"? If that's you, you're going to have to stop that behavior now.

Therefore, whether the bad financial straits you're in with your credit score are your fault or not, it's time to fix them. It's easier to do than you think, too.

First of all, time itself as a panacea for this type of thing. Simply beginning to be responsible with your bills once you get back on track financially helps to improve your credit score. Why? Because those who use your credit score to determine your level of financial responsibility are much more concerned with your behavior NOW than they are with previous behavior. Remember, a credit score is a trend, and you want the trend to show NOW that you are paying your bills on time. Therefore, if you can show that you cleaned up your behavior within the last two years, previously bad behavior isn't likely to have a great impact on your credit score.

So the first thing you need to do is to pull your credit reports from all three major bureaus and take a look at them. If you find anything on them that you don't recognize, contact the bureaus in question and challenge these inconsistencies. By law, they have to ensure that bad marks on your credit report you challenge are in fact your doing. If they can't, they have to drop these marks from your report, usually within about 60 days.

Once you have everything addressed in terms of errors on your credit report, it's time to address those financial shortfalls that are your doing. Contact creditors that you're in arrears with and make arrangements to begin payment. In addition, get and stay on top of your current bills. Set yourself up a budget, and cut up your credit cards or at least put them in the freezer; this way they won't be easy to get to. Don't use credit cards again until you've paid them all off.

With some planning and responsible behavior, you can rebuild a good credit score even if you've gone through bad financial times or have had previously irresponsible behavior.