How to Get Rid of a bad credit Rating

Millions of Americans suffer from bad credit ratings. Getting rid of bad credit is not impossible, as long as you follow some steps and be disciplined with your spending habits. Whether you've had some hard times in your life, or just didn't know the importance of a good credit score, it is never too late to change.

Instructions

1




First off, you will want to pay off any debt you have, starting with the biggest debt first. Change your spending habits to live under your means and devote some of your paycheck each month to paying down your debt. Debt consolidators can be a great resource to simplify things, although you should research first.

2

Get a free copy of your credit report through a free credit report service. This will help you gauge where you are and what progress can be made. You can use freecreditreport.com or any other credit report site, sign up, then delete your account before they charge you, which is usually 30 days.

3




Pay your bills on time. This is the number one way to get rid of a bad credit rating. Loan companies wan to see that you can pay your bills and that you are not maxing your cards out. There are bad credit loans out there but when you are ready to buy a car or a house, you'll want the highest marks possible on your report because your payments will be much much lower.

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Try to not use all your available credit. Lending companies want to see that you don't have to rely on credit and it will show when you are only charging a little bit each month of your total available amount. A good rule of thumb is no more than 30%.

5

Get rid of expenses so that it's easier to pay the bills each month. Do you have a big car loan? Sell the car and get a used car loan for a smaller less expensive car. Cars are depreciating assets and are very expensive. Try lowering your cable bills by getting rid of that expensive movie tier you never use. Eat at home more, whatever you have to do.

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Lastly, but this is important, don't close old credit accounts just because they are paid off or are standing idle. It is a myth that keeping idle accounts hurts your score. In fact, it will make it better because having more credit open looks good. Especially since its more credit you are not paying late or not at all. Let it sit, and don't worry about it.