Improve A Poor Credit History

Maintaining a good credit history is important.  How good your credit history is will determine whether or not you are approved for a mortgage, car loan, even an apartment lease or a new employment opportunity.  The better your credit history, the lower interest rate you will be charged when you are approved for that loan.

You may look at someone with bad credit and automatically think that the person is a deadbeat or someone who is irresponsible.  Sometimes, if you look more closely at the individual, you will find that his credit has suffered because of unexpected financial hardship.  Perhaps he lost his job, perhaps he suffered a long illness and could not work, perhaps there were unexpected repair bills and he was unable to keep making his payments on time.  Now comes the process of mending his credit and getting back a decent credit history.  It is very important that you have a credit history that is under control.

There are some people who simply cannot handle a credit card.  If they have open credit available they will find a reason to use it.  This does not apply to most people.  In order to avoid the temptation, some people have cut up their credit card so it cannot be used.  If you are afraid to have your credit card in your possession for fear you will use it, perhaps you have a trusted friend who can hold the card for you.   If you close an account it can have a negative effect on your credit score since you will have a lower ratio of total available credit to credit being used.

Your credit history is used to create your credit score.   Your credit score is determined by several factors.  It takes into consideration how much credit you presently have available compared to the total amount of credit available to you.  It is best for your score if you have only used approximately 30% of the total credit available to you.  Other things taken into consideration are how long your accounts have been opened, how many new accounts you have opened, what types of accounts you have and whether you have been late or missed


In order to keep on top of your credit history you should get a copy of your credit report at least once each year.  You should get one from each of the three major credit bureaus.  These credit bureaus are Experian, Equifax and TransUnion.  Do not be surprised if some of the information is different on each report.  If you find any errors contact the credit bureau in writing and include any backup information you have detailing the mistake.  The credit bureau will make the corrections to your credit report within 30 days and often this immediately improves your credit score.

If you decide to hire someone to help you improve your credit history be sure to be careful and do your research.  Read the fine print.  Determine how much, if any, fees will be charged for their help.  Be sure the people with whom you deal are reputable.  There are times when it might be advantages to consider a consolidation loan, but there are times when this is not a good option.  You will need to determine what course of action is right for you.  It will only make matters worse if you consolidate your present debt, run up your charge cards again and now have both the credit cards and the loan to repay.