How Can I Fix My Credit Rating?

By: Bruce Tucker

Each day, millions of adults throughout the United States struggle with the realities of having a bad credit rating. Some are turned down for credit cards or vehicle loans, others learn their applications for a new home loan have been rejected. If you are experiencing the restrictions that can result from having poor credit, you may already realize that your credit is in need of repair. Today, understanding how to repair your credit score doesn't need to be frustrating or stressful, thanks the wealth of financial information and resources available to consumers.

The first step in improving your credit situation is to know what information is listed on your credit reports. You can do this by ordering your credit reports for free from or by calling 1-877-322-8228. This service is provided by Equifax, Experian, and TransUnion, the country's three largest consumer credit reporting agencies that maintain and distribute your credit report. The Fair Credit Reporting Act entitles you to receive, by request, a free copy of your credit report from each of the credit bureaus once every 12 months.

Tips to Maintain Your Credit

Based on the information in your credit reports, credit scores are a tool used by lenders to determine the likelihood that a consumer will repay his or her loan. Fortunately , this rating is not set in stone. It can take time, but there are many things you may be able to do to improve your credit score.

* Pay your bills on time - Your payment history makes up 35 percent of your credit score. A period of not making timely payments will quickly drop your score but since the effect of a late payment diminishes over time, being careful to make all payments on time going forward will move your credit score in the right direction.

* Get current on missed payments - If payments are already delinquent, their impact on your credit rating will become more profound the more time they remain outstanding. A few 30 day lates are defendable, but a single 90 day late payment can cause your score to plunge.

* Contact your creditors if you are having difficulties making payments - If you expect that you will be unable to stay up to date on loan or credit card payments, you may be able to make arrangements with your creditors such as extending the loan period that will help you get caught up again. You could end up paying more, but if it keeps you from falling further and further behind, it will be worth it for your long term finances and for your credit rating.

* Try to keep low balances on your credit cards - Outstanding debt makes up 30 percent of your credit score. The closer you are to reaching the limits on your credit cards, the less stable your finances appear. Keeping credit card balances below 30 percent of the available limit will make your utilization ratio look better which will be reflected positively in your credit score.

* Avoid shifting your debt on credit cards - Transferring debts to a low interest rate card is a good strategy when working to whittle down debt, but a history of moving balances between credit cards looks like you are robbing Peter to pay Paul in lieu of of making your monthly payments.

* Carefully study credit offers before accepting - Some loans, including department store cards, are loaded with strings attached that can end up resulting in big problems down the road. For example, some no payment, no interest financing programs offered by retailers include interest rates that can skyrocket if you are late on a single payment and clauses where you may still be responsible for interest accrued during the "no interest" period.

* Use your credit cards responsibly - Keeping balances below 30 percent is a start, but you should also be careful to keep the number of cards you have in check, make all payments on time, occasionally use older cards, etc. For the most part, best practices for all credit accounts apply to credit cards as well but given the tendency people have to let their credit card spending get out of control, and how eager credit card companies seem to be to jack up interest rates or adjust limits, responsibly using credit cards deserves special attention.

Finally, for people who need additional assistance addressing their bad credit, an excellent resource for consumers are professional credit repair services. Professionals can lend their valuable expertise on important matters like disputing the questionable negative listings on your credit report and specific steps you can take to make the most of your credit score.

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More information about credit and steps people can take to fix their credit can be found by visiting Lexington Law's Credit Education resources. More information about Lexington Law can be found at

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