Building A Better Credit Score–Consumer Basics For Repairing A Bad Credit Score And History

Consumers who have been looking for ways to build a better credit score have often been able to implement basic credit repair practices that will allow them to not only increase a low credit score and improve their credit history, but also develop better financial habits that will allow them to avoid bad credit debt situations in the future. Understandably, each consumer’s credit situation and bad credit repair methods may be different, but applying basic bad credit repair methods will, for many consumers, typically lead to a more positive credit score and credit history if these debt management and repayment practices are properly implemented.

While there are standard steps that should be taken when a consumer attempts to improve their credit score, many advisers often counsel individuals to first get a copy of their credit report so as to look for any discrepancies or mistakes that may be a cause of their low score. Contesting any mistakes with a credit bureau will be necessary and will also make the process of repairing a bad credit score more manageable for many consumers.

However, consumers who do have debt currently in place, which may be the result of a low score, must make sure that they address these debts before the process of establishing a better credit history begins, as simply spending and repaying will be one of the only ways that consumers can start to acquire a higher credit score, and this can be incredibly complicated, if not impossible, if a consumer is still paying on bad credit debts. Obviously, consumers have a variety of methods they can use to erase debt or better manage their personal finances, but simply getting out of debt is one of the first basic steps that a consumer must take before they can truly begin to repair their credit.

Also, many advisers want consumers to be sure what exactly their credit score entails, as many may not know what is included in their FICO score, which could be a hindrance to bad credit repair. According to myFICO.com, an individual’s credit score is determined by their payment history, the amount they owe on various debts, how long they have had a particular line of credit or their the length of their credit history, new credit, and what types of credit are used.

Understandably, consumers who have a high level of credit and a low level of debt can also be seen in a more beneficial light when it comes to increasing their credit score, but when it comes to bad credit repair some individuals cancel credit cards after paying them off, which can be hurtful to a credit score. Essentially, canceling these cards after they have been paid off will lower a consumer’s credit utilization ratio and, again, will show that a consumer has a high level of debt compared to a low level of credit.

Many cardholders who have paid off their debts may keep accounts open but only use them a few times each year as a way to make small purchases and then promptly pay them off every few months, but consumers who are in need of bad credit repair before they begin the maintenance phase of keeping a positive credit history have often turned to either credit card use from unsecured or secured credit card offers. While secured cards have traditionally been the option that consumers use when attempting to improve their credit score, new credit card offers that are being advertised daily may offer consumers a better option at either consolidating debt so that they can more quickly erase various debt obligations at low rate, or if a secured credit card is needed in order to begin the credit repair process, advisers often suggest that consumers simply make affordable purchases each month and promptly pay off these balances so as to avoid fees associated with interest rates.

While rebuilding a credit score can take time, budgeting and simply applying basic financial practices that are responsible and within a consumer’s financial means typically lead to not only a higher credit score but it can help a consumer keep themselves in a positive position in terms of their finances.