Consumers who are trying to improve a bad credit score or maintain a positive credit history may find that common practices used by many consumers to either rebuild their bad credit score or continually see a positive score as a result of certain financial practices can be implemented or detrimental actions can be avoided, in the majority of cases, but there are some actions that could cause consumers to take a step back in either the credit repair process or when it comes to maintaining a positive credit score.
Understandably, consumers in a bad credit position realize that missing payments on debts, defaulting, or simply keeping a high credit utilization ratio can have adverse effects on their credit score, but if consumers pay their bills on time, keep their debt levels low, and simply spend within their means so that missed payments will not occur, may keep a good credit history or will show themselves to be responsible enough to handle credit obligations.
Yet, there are some actions that cause a consumer’s score to dip, but some of these drops may be minimal or insignificant, while others could have a major effect on a consumer’s credit score. One source of impact on a consumer’s credit score can come when a new account is opened as this requires a credit check or an inquiry into a consumer’s financial life, which could cause a small drop in a consumer score, but this is usually not incredibly detrimental.
Understandably, these credit checks could eventually mount up if a consumer opens numerous lines of credits or accounts during a short period of time, but by and large this will not necessarily do a great deal of damage to someone with a positive credit history, and obviously, in the majority of cases consumers who are attempting to repair their bad credit score will not likely open new accounts since they are not in need of more options to spend, but methods to repay.
However, one of the most obvious ways that consumers can do damage to their credit history or cause problems when they are repaying debt in the hopes of increasing their bad credit score is to miss payments or outright default on debts. Typically, these concerns center around making a negative stain on a consumer’s credit history, as they can stay in place for years down the road, however, consumers who may be in the position where they are attempting to repair their bad credit score do have options that can help them repay their debt even if they are having trouble in their financial life.
While there are opportunities that consumers may have for debt relief through a debt settlement program, this too can cause a consumer’s credit score to suffer as they will be paying a debt for less than the amount they originally owed. For this reason, consumers who may simply look to repair a bad credit score with the use of credit will find that, in many cases, simply opening an account, for a new credit card as an example, could cause a dip in their credit score but it may not be that substantial. However, properly spending within one’s financial means and repaying in a timely manner so that missed payments or overall costs do not become a problem will be necessary to not only repair a low credit score but help consumers remain in a positive credit position if they are simply trying to maintain a good score.