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Research: How to Wipe Out Bad Credit History with Good Spending Habits? -

Bad credit history is not so much a problem that cannot be overturned as bad spending habits are. In fact, the moment one changes his or her spending habits with the credit card, negative the bad credit and moving towards fair credit or good credit becomes easy and inevitable too. There are a few good spending habits that one must adopt in order to be able to wipe out bad credit history. Importantly this is going to be a question of discipline and commitment more than anything else.

Don't chase rewards if you have a tight budget

If your spending budget is limited, it would be silly to chase rewards. This includes purchasing more to avail discounts and trying to garner more reward points. At the end of the day, these are rewards which should come for what you have spent. They need not be chases after spending much more than what you can repay at the end of the month. The more you get tempted by these offers, higher the outstanding balance is going to be leading you to face a stiffer challenge paying back the debt.

Don`t charge your card when you have a mountain of debt already

If you have a high outstanding balance, it is a bad idea to charge your card further. This is because every time you charge it for say 10 dollars, in effect, you are paying the additional 2 dollars extra through the interest that will accrue on this amount when you fail to repay it. It is always a good idea to wipe of the outstanding balance before charging your credit card with more expenses.

Don't miss your payment deadlines and don`t procrastinate

If you have the money in your account and the bill in your mailbox, there is no reason why you shouldn`t be paying back your bills, whether they are credit card bills or utility bills. The only exception could be when you are using that money to make some interest during the grace period, doing which, requires a lot of calculation and financial knowledge. Missing payment deadlines not only hurts your creditworthiness but also adds to your principal because of the late fees and the extra interest that add up on your outstanding balance.

Look for balance transfer cards if your debt is high

Shopping around is always a good idea, especially when you are paying a lot of interest on your outstanding balance with your current credit card. If you can get hold of a balance transfer credit card which offers at least 1 year of 0 APR introductory rate, it will be a great lifeline for you. More importantly you can also talk to the card issuer, to decide what minimum payments are required to wipe off the debt in a stipulated time frame and then stick to the payment plan. This consistency will negate the negative effects of a bad credit history. It will also help save a lot of money paid through penalties and interests.