You have just checked your credit score and found out it is bad. After you recover from the shock, what do you do? There are several things you can do to help bolster a sagging credit status and begin to rebuild your score. If you have recently applied for credit and been turned down, you will get a letter in the mail detailing that bank's reasons for the decision. This can be a great place to start resurrecting your score. The issues the bank gives for turning you down are probably the things most impacting your negative score so if you can change them you will be one step ahead of the game next time you go to apply for credit.
Being forewarned is better than being sucker punched however. Instead of waiting for a bank to tell you what is wrong with your credit when you need their help the most, find out ahead of time. It is now possible to get a free yearly credit report and everyone should take advantage of that. Examine your report carefully and make sure there are no incorrect entries on your report. This can, and does happen so rather than being penalized for someone else's mistake, take care of these issues by reporting them to the appropriate credit bureau.
Do not close old unused accounts. People used to think that having too many credit cards made them a bad credit risk. However a large part of your credit score is based on how much you owe compared to how much you have available. So closing cards you have available credit on, but do not use only makes your available credit lower and your debt compared to credit higher. Keep your cards open, just do not use them.
Another reason for keeping those old, but unused accounts open is that creditors like to see a long history of credit. The longer you have had credit available to you the better. Closing an old card may make your length of credit shorter and lower your score.
Pay off outstanding debts. While this may seem like a no-brainer it is often the hardest thing to do. Many people pay the minimum monthly payments on their accounts thinking that is enough to give them good credit. It certainly doesn't do damage to their credit the way late, or non-payment does, but just paying the minimums and using the cards keeping the limits high has a negative impact all its own by maintaining a high debt to credit ratio.
Get on those registries. Keep lenders from checking your credit rating in order to send you junk mail offering you credit based on a pre-approved score that you didn't ask for. All of those inquiries look bad on your credit report.
Pay your bills on time. Again, this would seem like a no-brainer, but even a day or two late can get you dinged by the credit service and lower your score. Getting your payments in on time every month for over a year is a great way to rebuild your credit status.
To that end one of the best ways to begin rebuilding your credit status if you have really bottomed out is to get a secured credit card and use it to purchase one or two fair sized items, and then repay the debt with regular higher than required monthly payments for a year.
Author Resource:-
Martin writes for Poor Credit Solutions where you can find advice on fixing bad credit problems, such as how to clear a CCJ.
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