When it comes to your credit the better it is the easier it will be for you to obtain new credit such as loans, credit cards and a mortgage. The worse it is the more challenging will that be for you. Having poor credit is something that can remain on your credit report for many years and can be a thorn in your side when it comes to applying for new forms of credit.
As soon as you start to use credit you will begin to establish a credit history. This may be the first time you apply for a credit card, a student loan or a loan to purchase a car. Your credit history and your credit score make a difference when it comes to every aspect of your financial life, both present and future. You should never underestimate the importance of taking good care of your credit.
When you apply for credit of any sort the lending institution or bank is very likely to request a copy of your credit report from one of the credit bureaus. Your credit report will contain your credit score. The creditor will look it over carefully to determine your credit criteria and if you are credit worthy for the loan you are applying for. If you are deemed qualified then the credit score you have will influence the interest rate that you will be given.
Credit Mending Options
If your credit has suffered problems in the past then you are less likely to be approved for a loan or credit card. The good news is that credit does not remain static as it is always changing as your financial pictures changes over time. Here are 10 ways that you can repair your credit if it needs to be mended.
1. Always make all of your payments on time. You can make them early but do not make them late. Being prompt is important. One way to ensure you do not forget to pay your bills on time is to set up an automatic payment plan and pay your bills online. Observe all due dates!
2. Pay your balances on your credit cards in full every month. If you are unable to do so then make at least the minimum monthly payments. This is a definite credit booster.
3. Do not apply for too many new credit cards at one time. This does not look good when creditors check your credit report. Refrain from doing this.
4. Always make sure that the credit cards you have can provide you with available credit in the event that you need it. Maxing them out and then taking a long time to pay them back is not wise and can further damage your credit!
5. At least once in the run of a calendar year put in a request to be sent a copy of your credit report. There are three national credit-reporting agencies in the United States. While they all have similar credit information on you they may also differ somewhat. For this reason it would be a good idea to request a copy of your credit report from all three of them.
6. Once you receive your credit reports peruse them carefully for any errors. If you find any mistakes at all be they big or small you should get in touch with the relevant credit-reporting bureau to have them fixed immediately. The sooner the mistakes can be rectified the better this is for your credit.
7. Similar in nature to number three, do not go credit crazy and open up multiple accounts in a short span of time. In other words do not apply for a department store credit card, a bank credit card and a loan close together. This does not look good to prospective lenders because it makes you look reckless with the potential of new kinds of debt to contend with (and pay back!).
8. Act responsibly with your credit. Only use it when needed. Do not make the use of credit an everyday occurrence. You should not be using your credit card to pay for every little purchase that you decide to make.
9. Do not open up any accounts that you do not require, regardless of how much money you earn. This will end up being a burden to you that you just do not need.
10. Be aware that when you close an account such as a credit card account it will still show up on your credit report. Sometimes closing accounts is the worst thing you can do when it comes to your credit score. Be smart about your credit!
