Bad Credit Repair - How To Fix Your Bad Credit Score

If you have a bad credit score you need to understand that fixing this number is a multi step process. We would encourage you to set a goal or ideal range for your credit score to reach, before you get started.

A good credit score today starts at around 700 and this is because many lending institutions have changed their approval requirements as a result of the banking crisis. Your credit score has never been more influential in the lifestyle you live, than it is today.

Remove Bad Credit From Your Credit Report

Hands-down the most important thing to do to repair your bad credit is to remove any negative or an inaccurate listings from your credit report. This is going to require you to dispute the credit bureaus and potentially you may need to settle some outstanding debts.

Many individuals neglect to do this and instead will take every other step to improve their credit score except to clean their credit history. The reality is if you have any negative information such as: collections, outstanding debts, charge-offs, judgments, foreclosures, bankruptcies… on your credit report you will never be able to attain a good credit score.

These items will have less impact on your credit score as they age or get older and can only legally be reported on your credit file for 7 years, but if you have a bad credit item on your report, even if it is 6 years old it doesn't matter how much good credit you build your score will never be viewed as good by lenders. So instead we suggest you start the process with cleaning your credit report and then build credit.

Available Money To Borrow

The next most important thing when your credit score gets calculated is your utilization ratio. This in layman's terms is your available credit compared to total debt. You want to have available money to borrow or available credit because this makes it appear that you are in a secure financial situation and can are living within your means.

You show this most easily by having available credit on an unsecured credit card. The experts say you want to keep 70% of your credit limit unused or available. For example if you have a credit limit of $500 then you would not want your monthly balance to exceed $150.

Pay Your Current Bills On Time

If you pay your current monthly bills on time you can at least start to build some positive credit on your credit report. It is essential to remove the negative information however you must have some positive accounts on your report in order to get an excellent credit score. It may be in your interest to open a new credit line.

Your credit score will benefit from any form of new positive reporting accounts such as; a credit card, car loan, personal loan, bank loan… As long as the lender reports your account to all three major credit bureaus. You don't have to just live with bad credit, people remove negative information from their credit report every day. Getting credit today has never been more difficult and your credit score is reaching new areas of your life.

According to recent reports more and more employers are checking your credit before offering you a job. Your credit score already determines; how much you pay for auto insurance, the type of car you drive, if you own or rent your home, and so much more.

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