Fixing Bad Credit

4 Simple Strategies

Now that you have that nasty bad credit score and have been getting rejected all over the place on new credit applications, it's time to dig into rebuilding your credit record. I know it feels demoralizing and completely frustrating to keep getting notices that your applications were denied. There is light at the end of the tunnel though. It may take a while and you will have to be patient but it can be done. I should know because I have been where you are trying to repair my own credit. Be patient and keep chipping away. It will get better.

Let's get on to the meat and potatoes of fixing your credit. Basically your credit report presents a picture to any potential lenders and others checking on your credit history. If over time they can see that you are becoming more responsible and better at handling your money, they will be more inclined to trust you with new credit.

What you can do:

1. Build up a history of paying on time. Start with the obvious. Get your ducks in a row and get organized. That is probably the biggest stumbling block for most people. Make it a priority to mail checks or pay online in time so your creditor receives your payment before or on the due date.
2. At least pay the minimum payment on each account. If you can add even $5 to the minimum due, that little bit will have a dramatic impact on how fast your account is paid off in the long run. It doesn't seem like that little extra will make a difference, but over time it could really save you a lot on interest. Not paying at least the minimum will show up as a delinquency on your credit history and you will be right back where you started.
3. Open a few new credit accounts with low credit limits and make sure you pay these bills on time. Only do this if you know you can make the small payments on time every month. It will negate the whole purpose of opening these new accounts if you end up having late payments on them.
4. Try to keep your balances low on your credit accounts, especially things like credit cards. If you can keep the balances below 30-40% of your available credit on the account, that would be the ideal. So for example if you have a credit limit of $1,000 on a store credit card, you would want to keep the balance consistently below $300-400.

I know this all seems like a lot of extra work, but believe me; it will all be worth it. When you start saving boat loads of cash on credit card interest and can refinance your home loan at a much more attractive rate, you will thank me.

Be pro-active and take the bull by the horns. This is your money and your life, so take charge and get it done!

Expert: http://EzineArticles.com/?expert=Kari_Halstead

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