(Guest post by the guys at CreditScore.net)
People tend to learn the hard way that bad credit doesn’t just go away. It can take years to rebuild a destroyed credit score and fix financial woes. Often people experiencing financial difficulty find themselves in the dire straits, especially due to unemployment in the recent economic downturn. Overwhelmed by surmounting bills, it only takes few delinquent payments to ruin credit. There are a few things you can do to get your credit under control:
This sounds simple, but it’s important to pay down debt on your credit cards. Only use them when it’s absolutely necessary. Often people get themselves in trouble by having too many credit cards while only paying the minimum payment. Lower or eliminate all the debt on your credit cards, and keep only one or two cards for the future – picks the ones you’ve had the longest. This can help towards improving your credit score, especially if the balance is below 30% of the credit limit on each card.
Also, don’t close a credit card until it is paid off. Closing the card beforehand will not help improve your score. It’s better to pay down the balance than to close an account before it’s been paid off. Also, don’t open any new lines of credit, especially if your other cards are maxed or the debt is high. If you have a decent history with an older line of credit this helps your credit record and in turn will positively affect your score.
Responsibility is key to establishing a good history of credit. It’s easy to find your way into financial straits by using a credit card when funds are low, however, you must use restraint. Plan a budget, and live within your means. If you follow this plan there will be no unwelcome surprises when you apply for a loan, house or rental property. Bad credit and bankruptcy can follow you for a long time and make your long-term plans impossibilities.