by Juana

Created on: May 19, 2008

The first thing to know about repairing your credit is that you can do it yourself and at much less of a financial cost to you.

There are countless websites out there offering to fix your credit score as if they could wave their magic wand and make it so, but it's not a magic potion that is going to fix your situation it's you and some simple to follow guidelines.

If you're here and you're reading this then you are obviously ready to do what it takes to make your bad credit a thing of the past and by following these steps and suggestions you are well on the way to making that happen.

1) KNOW YOUR CREDIT SCORE:

I can't stress the importance of this number one guideline enough. Surprisingly a large percentage of the American population have no idea what their credit score is until it's too late and they are knee deep in trying to buy a house or a car.

Don't let that be you. No one wants to lose their dream house or the car they've been saving up a down payment for just because they've made a few mistakes or worse someone has made them for you without your knowledge.

A. CREDIT SCORE:

Simply put a credit score is how you as an individual look on paper to all your creditors' current and perspective. A bad credit score can be the difference between getting what you want and getting left holding the empty bag.

Everything you do credit and payment wise is tallied up with a point system to determine your three digit FICO score and some things can have more weight than others.

B. UNDERSTANDING FICO:

To understand your FICO score it helps to know a little bit about how it's determined.

FICO SCORING:
Individual Payment History- Late payments and failure to pay can alter this portion of the score, paying on time and paying all loans will help you to obtain the highest score in this portion.

Credit History- Credit bureaus will look at both the length of time you've had credit and the amount of credit you have recently applied for or obtained.

The longer you've had credit the better off you are, as long as you've been diligent in paying it down or even off, and although it's good to apply for credit there is such a thing as too much credit, it gives the credit agencies the impression of someone in a desperate financial situation.

Types of Credit-Types of credit can also affect the score. A credit report with mostly credit cards and no ongoing mortgage, auto loan or loans paid off can be viewed as risky.

Current Debts/ Ratio of debt-The final determining factor of your FICO score is

• 1
• 2
• 3
• ...
• 7
• Next Page >>