Bad credit can be toxic. It upsets your overall financial health, and can entangle you in a vicious circle of debt, interest and limited options from which it is difficult to emerge. If you have bad credit, believe me, you are not alone. Now that you find yourself in such a position, the best thing you can do is arm yourself with knowledge, understand your options, and begin undoing the damage.
Can bad credit be completely erased? That is unlikely. However, you can certainly improve your credit score by making smart decisions from here onwards. A higher credit score will greatly further your financial well-being, and is a realistic goal to strive for even if you are in debt-related doldrums right now. There are two steps you must take to accomplish this: pay back your debts, and improve your credit history.
To assess your current financial situation, get a report on your credit score. This will enable you to assess exactly where you are, whether there are any false claims against you or any mistakes have been made by financial firms in reporting your history.
There is no other or easier way to say this: you must pay back your credit card debt if you want to break out of the downward spiral of bad credit. Start with the card on which you have the lowest balance to pay. Focus mainly on this card, and put extra money towards paying its balance off. The more you pay towards balance, the more your interest will decrease. By tackling the lowest-debt card first, you are controlling your interest, which has been rising ever since you fell off the credit wagon. This will also help you pay off one card quicker. Then you can start on the next-low card, make it your priority and pay its balance sooner than everything else. In this manner you will be able to pay back your total outstanding debt much sooner.
The next step: do not cancel your cards after you pay them off! As long as the card does not have a large annual fee, you gain more by keeping it (and not using it) than having no cards and no debt. It will demonstrate your reliability and raise your credit score. You can track your score over time, and watching it improve will give you great motivation to make sound financial decisions in the future.