Things you shouldn’t do if you are recovering from bad credit history
Advertising Disclosure is an independent, advertising-supported web site. 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. has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » Research » Guides » Building Credit History » Things you shouldn’t do if you are recovering from bad credit history

Things you shouldn’t do if you are recovering from bad credit history

Updated: December 26, 2012

Add to Favorites:
Coming out of a bad credit history can be a difficult phase, but it is quite possible if credit card customers have a proper plan and implement it with the right attitude and discipline. Along with picking up some good habits, credit card customers with a bad credit history should avoid certain bad habits or one-off actions, which could drag them down. Don't close an account If you have a bad credit history, the last thing you want to do is close an account. That will lead to your losing the entire history, reducing your credit score further. There are various strategies to negate the adverse affects of a bad credit history and improve it, but you need to keep your credit card account alive. This holds true even when you are going for a balance transfer or another low interest rate credit card. It is difficult to manage multiple credit cards, but it is also important to keep your history safe and intact. You will lose all your expenditure history if you close the card or surrender it. Don't go for a lower credit limit card Some credit card customers try to move to a credit card with a lower credit limit, in order to reduce their spending. To be honest, you need to come up with a better strategy to eliminate your outstanding debt rather than just reducing your credit limit. This is because the credit score calculation depends on the way you are utilizing your credit. If your outstanding balance is very close to the credit limit, then your credit score will be lower. It is good to have a high credit limit and a lower outstanding balance. Don't chase rewards Rewards on credit cards are for those who have excellent credit and are looking to make an extra saving. However, those who are having a bad credit history should get the basics right. This involves making the minimum payments consistently, keeping the expenses on the credit card to a minimum and to try and reduce the debt as much as possible. Chasing rewards could lead to adding more debt, sometimes more than what you are capable of paying off. Most rewards are designed strategically to tempt the credit card customers into greater spending and it is important to learn to identify and avoid falling into that trap. Don't apply for more credit Applying for more credit only shows you are desperate for credit. Every time you apply for a credit card and get rejected, your credit history will be adversely affected. More importantly, the next time you apply for a credit card or loan, the company would try to focus on how many times you have been rejected thus affecting your chances of getting good terms too. Therefore, while you are recovering from bad credit history, you need to be disciplined and make your payments consistently rather than looking for new credit cards to pay off the old debt, which is a bad idea and increases the interest even more.

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

Related Research:

How to Get Free Wi-Fi in the Air

By Herbert Moore, Posted: September 28, 2016

Sometimes in-flight Wi-Fi is the bare necessity when you travel abroad or within the country. However not all airlines offer free in-flight Wi-Fi. There is only a couple of airlines that will allow you to use Wi-Fi ... Continue reading

Amazon Credit Cards Review

By Allison Martin, Posted: May 30, 2016

When was launched 20 years ago, few could have envisioned how far the company would come. What was once an online specialty bookstore is now an Internet juggernaut that sells nearly anything and has made major inroads into ... Continue reading

How Much Do Shell Cards Really Save on Gas?

By Allison Martin, Posted: April 20, 2016

There is an endless amount of gas cards on the market, and practically every major gas station, including Shell, has options to choose from. In fact, Shell offers two options for gas cards for consumers. Continue reading