5 things you shouldn’t do with a bad credit history

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » 5 things you shouldn’t do with a bad credit history

5 things you shouldn’t do with a bad credit history


Updated: December 26, 2012

By
Add to Favorites:
Bad credit history could be the result of some irresponsible credit card spending, missing payment deadlines and allowing outstanding balances to grow beyond a limit where you can pay them off. Bad credit history is largely responsible for the decreasing credit line that is accessible to you and unless you do something about it, the slide you take cannot be controlled. Here are some of the things you should avoid doing, though, when you have a bad credit history. Closing your credit card accounts Having a credit history is always better than no credit history at all. There are many credit card issuers which will grant you balance transfer cards with 0% introductory APR, but that doesn't mean you close your existing accounts. The moment you close your existing credit card accounts, you lose whatever credit line you have accessibility too, and have to start from scratching. Closing the accounts is a bad way of trying to repair credit history. Reduce your credit limit Transferring your balance to another card is a good option as long as you don't close your old account and the new card adds to your credit limit. If your new credit card limit is less than the older account you have and you close it, the ratio of your outstanding balance to available credit reduces. This ration known as credit utilization ratio is important for a good credit rating. Hence it should be your primary aim to keep your credit limit as high as possible and your outstanding balance comparatively as low as possible. Declaring bankruptcy Bankruptcy is one of the things that remain in your credit history for a longer period of time than any other negative marks like missing bill payments or defaulting on loans. Credit bureaus can keep pulling it out for as many as 10 years, which means you would find it difficult to get credit for a long period. Therefore trying to work a way out of your debts by paying them off or by negotiating a reasonable amount with the credit card companies or lenders is a better way, although what the lenders report to the bureaus is still up to their own discretion. Missing bill payments Negotiating with the credit card companies for a minimum bill payment scheme is a good option instead of being confused over how much to pay to the credit card companies every month. Missing the monthly bill payment deadlines, at a time when your credit history is already bad, will push you further into the hole, and consistency is very important. In fact, as per the new reforms, by consistently paying the bills on time for 6 months, would allow you to get back to the older credit card interests, in case your credit card issuer has hiked the interest rate due to their consistent late payments. Spending extravagantly It is a no-brainer that when you cannot spend extravagantly when your credit rating is low. Instead every penny should be spent in paying off debts and some extra amount too, is possible.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Interest Free Credit Cards: Pay No Interest Until 2019

Interest Free Credit Cards: Pay No Interest Until 2019

By Credit-Land, Posted: May 23, 2017

Carrying a balance on a credit card is wasting your money on interest fees. It is easy to avoid interest payments on purchase transactions by paying off the entire card balance by the due date each month. But what to do if you are already ... Continue reading
Dashlane: Password Management and Shopping Ease in One Simple Product

Dashlane: Password Management and Shopping Ease in One Simple Product

By Angela Rose, Posted: May 3, 2017

Are you terrible at remembering passwords? Are you so terrible, in fact, that you often use the same one for multiple websites? If so, you’re not alone. Continue reading
SoFi Making Lending Social

SoFi Making Lending Social

By Dar Dowling, Posted: April 26, 2017

Since 2011 SoFi, a San Francisco based online lending company, took the lending industry by storm, when they became the first online lender giving people access to affordable student loan refinancing. Continue reading