One of the most common causes of a bad credit rating is having to deal with a large number of relatively small debts. It can be difficult to keep track of what you should be paying to whom, what you've paid, and how much it's all costing you in interest charges.
Not only that, but smaller debts such as credit cards, store cards, catalogue accounts, etc, usually have a much higher rate of interest than a single loan for a larger amount.
Pay off your debts
By taking out a debt consolidation loan (often secured on your home, but not always), you can pay off all your debts and only have to deal with a single payment each month.
You will also benefit from a much reduced interest rate in most cases, meaning that you either have more disposable income or you can pay off your debt quicker.
Debt consolidation loans can be arranged by almost all personal loans companies, and as the whole point of this kind of loan is to simplify complicated and expensive credit situations, the lenders will usually be sympathetic to applications made by those with less than perfect credit.