Fastest Way to Repair Bad Credit

Consumers who have gone through a bankruptcy, fallen behind on bills or who have otherwise seen their credit score decrease can improved their scores almost immediately by taking the proper steps. Though long-term credit repair usually requires a credit repayment plan, there are some fixes available to consumers who need to improve their score quickly.

Obtain Credit

When you apply for a loan, the creditor wants to know that the money it gives you will be repaid. To satisfy itself that this will happen, a creditor will look at your credit history to determine how you have used credit in the past. If you do not have a credit history, potential creditors have no way of judging how risky a borrower you are. One simple way to establish a positive credit history is to apply for a credit card, such as a gas station or department store card.

Pay Credit Card Balances

If you already have credit cards but carry a balance on them from month to month, you can quickly raise your score by making payments on the cards with high balances. Typically, carrying a monthly balance in excess of 25 percent to 30 percent of your card's credit limit will lower your score. Paying off any balance so that it is below this percentage will have a positive affect on your credit score.

Diversify Credit Types

Part of your credit score is based on not only the number of loans you have, but also the variety. While having a positive history with multiple credit cards is good, having a positive history with a car loan, mortgage and a credit card is even better because it shows you can manage multiple forms of debt. If you have only one form of credit, consider obtaining another kind of loan to diversify your accounts.

Use Unused Accounts

Another factor in your credit score is the average length of the credit items you use. If, for example, you've had a credit card for 10 years but have not used it in several years, that card may not appear on your credit report. If this is the case, you can quickly raise your score by using an old unused credit card with which you have a positive credit history.