When talking about a bad credit score this refers to your credit history and to repair this damage is a draining task, a person should manage their finances properly making sure that they have a budget that is prioritized so that you don’t default on your payments
How do I repair a bad credit?
To repair a bad credit score is a lot of work, it requires discipline and good budgeting
Pay-down balances: In order to improve your credit score you need to pay down your balances, this may seem to be ineffective when you already have a bad credit score but it actually helps to make up the damage that has been done to your credit score. Even when you pay off all your balances you may find out that you have a high utilization ratio than expected. This may be due to previous default, paying regularly will improve your utilization ratio and credit time but not damage is not done instantly and the repairing process isn’t instant as well it will take time and payment without defaults.
Eliminate nuisance balances: This is a good way to better manage your credit, nuisance balances are balances that are easily avoided. An example is if you have two credit cards, why not cancel the other and have only one credit card making it easy for you to pay balances on the single card then paying balances on two credit cards. Paying well on this one credit card can help you improve your credit score then defaulting on one card and paying well on the other, this is meaningless because your credit score is being brought down by the card that has defaults.
Don’t remove (good) old debt on your report: Some people have a firm belief that if they old debts are reflected on their credit report, this has a bad notation on their credit score. This is indeed incorrect it is actually the opposite, old debts that have been paid off are historical proof that you can pay of your debts. They make your report more appealing, so when looking for credit this doesn’t count against you but rather it works for you.
To improve your credit score try to leave the good old debts as long as possible on the credit report so that the report is more appealing and magnificent to the eye that catches it.
Always pay bills on time: Paying your bills on time is important for improving your credit score what may seem like a small thing, may just turn out to be a big issue later on. A default is a default no matter how small, many small defaults constantly occurring make up for continues defaults and when combined they can be very damaging to your credit score. Credit score are determined by what is represented on your credit report, so if all those small defaults are represented on your credit report your credit score will be affected. A good credit score is determined by month to month on time payments
Stay away from risk: The biggest risk to your credit score is hinting at risk, this means that you trend on the line of being seen as a risk by creditors. This is identified by sudden change of behaviour like suddenly missing payments or paying less on monthly payment. This makes you appear as unreliable, other red flags would be to take out cash advances or use cards at business that at a later stage can been seen a money stress factors.
Obsession is bad: when looking to get credit you should be less focused on your credit score and more focused on making your payment on-time and to the correct amounts, the credit score will be a reflection of your payment habits and your credit score will improve.
A credit score is taken from your credit history good payment constantly over a period of time improves your credit score. To repair a damaged credit score is simply to be discipline with your payments, paying on time and the correct amounts. Being patient and knowing that it will take time to repair the damage is also being part of it.
If you feel that the debt is too much to pay by yourself and you need help don’t take out a loan to repay the debt but rather consider debt review. Taking a debt to close of another debt is still a debt and you will still have to pay back that debt so it holds no improvement of your financial situation.