Why Do You Care About Your Credit Score

You care because it determines so much in your life. A poor credit score can affect your ability to gain employment in some sectors; it affects your ability to get new credit; and, it hits your pocketbook directly because you have to pay higher interest rates on everything you purchase on time - credit card purchases, cars, and mortgage. People with really bad credit have a terrible time even renting an apartment!

How Do You Get Bad Credit?

It's easy to do, and is the result of many factors. Here are the most common:

1. Consistently not paying bills on time.
2. Late payments on a mortgage (more than 30 days after its due date)
3. Too much debt
4. Failure to pay child support
5. Credit cards on which the balance is more than half of the credit limit
6. Collections, judgments, bankruptcy
7. Constant inquiries on your report as you try to obtain new credit

The Fix Ain't Always Easy

One way to repair your credit rating is to begin paying all of your bills on time and, during this time, to request no new credit. It can take up to a year of perfect payment history to affect your score by 60 points or so. The second year it goes up more, and so on. This is an acceptable method if you are not in a hurry to get the repair.

More rapid methods involve the following:

1. Get a secured or unsecured credit card. Charge $50 the first month and pay the entire balance off. Charge $75 the next month and pay the entire balance off. Do this for 4 months, with gradually increasing amounts, and you can see a 40-50 point rise.
2. Pay your credit card balances down to less than 50% of your credit limit on each card. This can really pop your score. You may have to get creative by transferring balances around, but this does work
3. Be certain to get a copy of your report and go through each item. The three bureaus are not perfect, and there may be mistakes. You will need to contact each bureau in writing if you find mistakes, and you will have to keep on them until the mistakes are corrected.
4. Some ingenious entrepreneurs have opened up businesses of "renting credit." For a monthly fee, you can actually have your name added to the credit card of someone with impeccable credit. Of course, you never get the card, and you are never able to charge on it, however, the perfect payment history will begin to show up on your credit report. Some people rent multiple cards and spike their scores significantly in a very short time. Part of your fee pays the credit card owner; the rest goes to the company.
5. Do not worry about paying off collections. That should be your last item of concern. When a debt goes into collections, and it is reported to the bureaus, your credit is damaged. Paying them off doesn't affect your score positively.
6. Be careful about number of "pulls" you have. Everytime some potential creditor pulls your report, it can damage your score. This is because it is a sign that you are attempting to get more credit. The more debt you have, the more adversely affected is your score.
7. There are hundreds of "credit repair" businesses vying for your business. Many promise the moon, but, in reality, can only do so much. Still, if you ask the right questions, you can probably select one that really can do you some good. Finding someone who has actually worked for one of the bureaus or reporting agencies is your best bet. They know all the "ins" and "outs" and all of the little details of scoring.

Getting your credit score/rating repaired takes work and, in some instances, will involve some cost to you, whether it is paying more on your debt each month, "renting" credit, or paying someone to repair it for you. Once you do get it repaired, please be mindful that you do not want to go through this again. Your credit is with you for life and can definitely affect your entire lifestyle.

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