Credit problems seem to flourish lately. Debt can be the bi-product of credit card spending or from online personal loans that were not paid back on time. While the act of fixing a person’s credit completely may not be realistic, there are important steps that can be taken to certainly improve the credit history and therefore credit score.

Below is a guide to help achieve this. By following these steps, over time, a person’s credit score will be improved without fail. It is important to realize however, that credit scores are not updated daily by the credit bureaus and any changes made to a person’s credit history may take at least thirty days to be amended. Patience is the key to fixing credit scores.

  • Review the credit report and ensure that there are no irrelevant entries that are negatively affecting the credit score. These may be old loan agreements that have been paid, wrong data such as the amount of a credit limit or even somebody else’s data mixed up with another’s. The credit bureaus need to be made aware of these to remove them from the credit file. This may increase a credit score quickly and is a simple process;
  • Ensure that on credit agreements with a maximum expenditure limit such as a credit card that the balance remains below 30% of the total credit available. Credit bureaus use the balance to help determine credit worthiness;
  • Ensure payments are made on time and in full for all credit agreements. Even one or two late payments can have a big impact on a credit score;
  • The following have the most negative effect on credit scores, they are in order of importance and should one still be on file when it can be removed – request it to be removed immediately; bankruptcy, foreclosure, repossession, loan defaults, court judgements, collections, past overdue payments, late repayments, credit rejections, credit enquiries;
  • If an individual has little or no credit, applying for more credit products will help build a better credit history. Therefore credit ratings will improve if these accounts are kept in good standing;
  • Ensure repayments are made on time by setting up a direct bank payment from a bank account. If there are available funds in the bank account, late repayment defaults will be avoided altogether;
  • Use a credit card regularly. If little history is built up credit scores will not improve. The best idea is to use a credit card for a small purchase and then pay off the balance in full each month;
  • Do not apply for too many credit applications in a small period of time. Each application will be noted on the credit file and will act in a negative manner;
  • Avoid too many credit card balance transfers, these may save a person money, however they will negatively affect a credit score;
  • Ensure that the individual is registered to vote at a certain address;
  • If possible try not to change address or job frequently;

It is important to realize that credit cannot be repaired if a person’s finances are in a negative state. If bills and repayments re still being missed then credit scores will not improve no matter whatever other action is being taken. Repairing credit history takes a considerable amount of time, so patience is required.