How to Improve Bad Credit

If you have blotted your copybook and bear the stigma of having bad credit, you need to work to improve it at the earliest opportunity. Bad credit can blight your future financial dealings as it signifies to lenders that you are high risk. Some lenders will see this as an opportunity to target you and make money from your efforts to rise up through the credit ranks to a position of security again, whilst others will simply slam the proverbial door in your face.

You may also find that the door to a job opportunity is also slammed shut as 60% of employer’s request, with your permission, a copy of your credit report. Insurance companies will draw a correlation between your bad credit and your seemingly irresponsible ways, and penalise you on the assumption you won’t maintain your property of auto in good repair. It is crucial in today’s credit driven America that you work to improve your bad credit.

Usually by the time people think about improving their credit score they have put any debt behind them and are turning over a new leaf. If on the other hand you still have some debt there is further information here on how to reduce it.

The best way to improve bad credit is to start using credit again so that your financial activity will be reported to the credit reference agencies. Use of payday loans and pre paid credit cards will make not an iota of difference to your credit score as they go unreported to the agencies. You need to obtain either a credit card, store card or a loan. Although store cards are easy to obtain they do not carry a weighty reputation in comparison to other credit cards, so it is better to approach a reputable lender first in your quest for a card.

If you have a good relationship with your own bank they may be willing to offer you a credit card. Obviously if they are one of your creditors you did not maintain good payments with you would be better advised to look further afield. With bad credit to your name you will need to accept that good credit offers are not going to be there for you, leaving you with a choice of sub prime lenders who you may feel are best to avoid.

If you are prepared to take the quite sensible step of using secured credit for a year to build your credit up then it is possible to find secured credit cards which do not carry exorbitant fees and are issued by reputable lenders. Used responsibly secured credit cards which report to the credit bureaus are a good step to move effortlessly back into unsecured credit, and encourage saving at the same time as they require a security deposit equal to your line of credit.

If you opt for that route and follow all the Fico guidelines on how your credit score is complied within that year, it is possible to rebuild your credit. Your responsible handling of credit will begin to carry more weight than past blots. There is information here on how your Fico score is made up.