Having bad credit can seem like a nightmare. You want better credit, but you first need to get credit to start rebuilding, and no one is willing to grant you new credit. It's like playing a rigged game of chance where all the odds are stacked against you.

But it doesn't have to be that bad. You can rebuild your credit score no matter what happened to bring you down. Whether you're recovering from a bankruptcy or just trying to get your credit score up again after making some late payments, you can use these steps to start you down the right path.

Step 1. Get the information.

You can't start rebuilding your credit until you know what's in your credit report. Everyone has the right to view a free copy of their credit report once a year. However, don't be fooled by all those websites that offer you free credit scores or reports. These sites typically try to sell you a monthly subscription plan to ”monitor” your credit. Don't buy it. Instead, go to the only site authorized by the Federal Trade Commission to provide your free credit report: annualcreditreport.com. Be sure to get copies of all three of your credit reports, as each of them can contain different information.

Step 2. Change the mistakes.

You'd be surprised at how often credit reports are wrong. While you can't remove items that are true, you can remove anything that isn't. To remove incorrect items from your report, contact the credit reporting agency and demand the item be removed. Be prepared to back up your claim with any evidence you have. Be sure to only send copies, not originals. Once you challenge the item, the credit reporting agency will rule on your claim and decide whether or not to take it off your credit report.

Step 3. Get credit.

Once your credit report is as clean as you can get it, you've got to get started building your score again. How? By getting a credit card. But not just any old card will do. You'll need to get a secured credit card. Unlike regular credit cards, secured cards use collateral. Usually, the funds used as collateral are in your bank account or provided as a security deposit. These cards typically have very low credit limits, but because they are secured, almost anyone can get them. You can usually find the best secured credit card offers at your local credit union.

Step 4. Pay your bills and Keep Credit Low

The single biggest factor making up your credit score is your payment history. If you pay your bills on time, your score goes up. If you are late, it goes down. It's that simple. No matter what bills you have, pay them on time. Pay them every month. Not only that, but don't use up all your credit. You need to use your cards regularly, but try to keep the amount you use to less than 30 percent of your credit limit. Creditors want to know you can control your spending habits. If you pay your bills on time and limit how much credit you use, your credit score will show some quick gains. By keeping your debt low and making payments on time, your score will show definite improvement.