How to repair 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 » How to repair a bad credit history

How to repair a bad credit history


Updated: December 26, 2012

Add to Favorites:
There are ways in which a person who has earned a bad credit history can re-establish his credit line. The few steps that can be taken by him to do so are as follows: 1. Repayment of bills on time - All loan holders are advised to repay back their loan on time without default. A late payment fee not only incurs charges but most importantly, gives a bad credit score. In case the loan holders for some financial reason is unable to pay his monthly bills then it is advisable that he informs the lender institute about this prior to the due date. Cheques that get bounced or late payment or no payment of EMI on loans also call for a bad credit history. 2. Decrease the number of credit lines in your name. One must remember that less credit accounts in your name, the less likelihood of acquiring a bad credit score. This can be done by consolidating all the loans in to a single loan. Consolidating loans mean taking a larger loan to repay back all the smaller loans. This helps not only in decreasing the interest rates but also in scoring a good credit history. 3. Bankruptcies, tax defaults or late payment of federal and government taxes also call for bad credit history. Bankruptcy has a long lasting effect on the credit score of a person as it stays listed on the credit report for as long as ten years. Tax defaults remain listed for around seven years. 4. The amount of loan taken also affects the credit scoring. Lower the loan amount better will be the credit score. An individual with a bad credit history needs to ask his creditors to lower the credit availability amount. This will help in decreasing the loan amount and therefore help him re-establish his bad credit history. 5. Get a co-signer to sign the loan amount. Remember that with a co-signer, repayment of the loans also becomes the responsibility of the co-signer. In case you fail to repay, the co signer will be held responsible for the loan default. The other way how the co signer can affect your credit scoring is by his own credit scores. A co signer who has an established good credit score can also help the loaner to ride upon his credit score to re establish his bad credit history. The case will be the opposite if the co signer is found to have a bad credit score. 6. A secured credit card will be the best way to re-establish the default credit history of a person. In a secured credit card the person needs to keep a basic amount of money in the credit account. This ensures the creditors that you will not run away with their money and incur losses to them. 7. Sometimes a bad credit history also gets reported by human error or by identity theft. Credit card scores are calculated with certain data. A miscalculation on the part of the credit history agencies might also result in a bad credit history. For this reason, it is essential that individuals get hold of an annual credit card report issue from the agencies. This will help him challenge any kind of credit card report discrepancies and will help in re-establishing his credit scores and hence his bad credit history.

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

Related Research:

How to Subdue Wedding Expenses and Earn up to $1,000 for Honeymoon

How to Subdue Wedding Expenses and Earn up to $1,000 for Honeymoon

Posted: June 21, 2017

Whether you are married or not, we all agree that marriage is incredibly important for a person. It signifies the beginning of two people as a team, as a family, of a long commitment. It is a newly born union and the sign of your choice, ... Continue reading
How To Choose The Best Credit Card For Everyday Spending

How To Choose The Best Credit Card For Everyday Spending

Posted: June 21, 2017

When you reach for your wallet to pay for groceries, gas, dinner out, or any other everyday purchase, are you searching for cash, a debit card, or a credit card? Many people hesitate to charge this type of everyday spending to a credit ... Continue reading
How to Save Money. Best Credit Card Deals and Tips.

How to Save Money. Best Credit Card Deals and Tips.

Posted: June 20, 2017

We all've been through or may find ourselves in such an emergency when money is needed immediately. Lucky you are if you have savings for unexpected expenses. If not, it's never too late to start saving money. There are different ways to ... Continue reading