Bad Credit History and How to Get Rid of It

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Credit Card Applications » Research » Guides » Building Credit History » Bad Credit History and How to Get Rid of It

Bad Credit History and How to Get Rid of It


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
There are many people who take their credit score seriously. If you are one of those people who have a bad credit score or a massive outstanding balance on your credit card, you are in for trouble unless you decide to improve upon the credit score right now. Motivation to not let the situation slip through your fingers and crystal clear planning and implementation will keep you in good stead. Why Worry about the Credit History? You need a house mortgage loan. If the credit score you have is 100 points less than that of your colleague's you can easily end up paying 5 - 10% more interest for the same loan, even though both of you are from the same office or have the same earning capability. Why should you choose to pay extra when you can get the same interest rate just by improving your credit score? Go to a credit card company, a hotel booking, an entrepreneurial loan or any other place and you will find that people look at your credit score even before they start talking to you. The lower your credit score, the lower is your creditworthiness and hence less lenders will trust you with their money. Even if they do, you will be slapped with ridiculously high interest rates. How did Credit History go Bad? Credit history is everything that you have done in the past. Your bank accounts, your debts, loans, spending, outstanding balance, the loans defaulted, monthly payments missed, number of accounts held etc. So, if you miss paying the monthly payment once, it reflects poorly upon your credit score. Your score suffers terribly, if you have repeated outstanding balances on your credit report too. If you fall back on mortgage payment, your score suffers further. How to Improve Credit history? Improving credit history doesn't happen overnight. But it can be done with planning and resolve. The first thing to do would be paying back the debt on your credit cards as soon as possible. Some banks offer balance transfer, but if you can manage paying off individually it is better, because balance transfer may lower your credit, unless the terms you get are really good like 0% interest for a whole year, which will help you pay back the credit faster. You should shop as less as possible with the credit cards to ensure your debt comes down gradually. You show consistency with your monthly payments. Apart from these normal things that you should follow sincerely, you can also try to protest for certain charges that have come on your name without your fault. The monthly payment miss because of their mistake or misreporting, the wrong balances or the late update of the credit card reports etc. could all be challenged. There are companies which specialize in that and you can take their help to get as many negative things off your credit card as possible. By doing all this, you are slowly cleaning your credit history.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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