Improving A Credit Score And Information To Help Consumers Understand What Actions Affect Their Credit

As consumers are looking for opportunities and methods for improving a credit score, it is necessary to find information that will help them not only put themselves in a better financial position but allow them to understand how their various financial actions will affect their credit, and in some cases, what will help them get into a better position within their financial life. Many consumers have seen their credit score drop for a variety of reasons, but there are certain actions that may have led to these decreases, as well as, methods that can be easily implemented to help consumers begin the process of improving their credit score.

Obviously, one of the more widely used practices by consumers to increase a bad credit score or simply improve a score that may be somewhat decent is through the use of credit cards. Many consumers either turn to affordable unsecured cards or seek out a secured credit card for the specific purposes of bad credit repair, but there are also aspects outside of simple buying and repaying practices that will influence a consumer’s score.

According to an article on MSNBC.com consumers need to understand that factors like payment history, the total debt they owe, the length of their credit history,new lines of credit, and what type of credit they have currently in use will all play into whether their credit score drops or improves over time. Some individuals fail to realize that the small actions, such as opening a new credit card account, can lead to dips in a consumer’s credit score, as any time someone submits an inquiry to look at a consumer’s credit report, this can have adverse effects. Certain consumers may have opened up different credit card accounts over a short period and, despite having a higher amount of available credit, these credit inquiries have usually led to a decrease in a consumer’s score for a set period of time.

However, consumers must also realize that factors such as having a high amount of debt in relation to a consumer’s credit score, missed payments on various forms of credit, or even closing a credit card account, as an example, can all be areas where consumers may have made a mistake that led to a lower credit score. Understandably, consumers who have either been guilty of missing numerous payments to various creditors or defaulting outright will see a huge stain on their credit score, so smart financial practices and repayment methods are necessary, but when it comes to simple everyday use of credit cards, consumers need to keep their debt levels low and affordable in order to avoid setbacks.

Many consumers will attempt to pay off credit cards, as another example, and then close out these accounts, which can be detrimental as, again, the length of a credit history for a particular card can be beneficial for consumers who happen to be using their cards to improve their credit score. There are some advisers who, obviously, support paying off credit card debts, but when it comes to closing accounts this can be harmful for a consumer’s score and, in some instances, these counselors have advised cardholders to simply keep the card that may have the longest credit history and use it more often for everyday and affordable purchases, but also use other cards every few months or so to keep them active and avoid setbacks that come with the closing a credit card account.

Essentially, the bad credit repair process or action for establishing a good credit score can be similar for certain consumers, but understanding the basics of a credit score are necessary so that consumers will not set themselves back despite the fact they are attempting to move forward in their financial life. Obviously, the methods used by consumers will greatly differ, depending on their personal situation, but consumers can usually simply review their credit history, implement smart budgeting and repayment habits, and generally keep their debt low and affordable if they wish to see less problems related to their credit score and financial life in the future.