How To Fix Bad Credit

It sucks to have bad credit. Not only do you have to deal with higher interest rates, less forgiving terms, and the likelihood of rejection for certain credit requests, but you also have to contend with maximum limits and other restrictions placed on your borrowing ability. If you find yourself in a situation with a less than stellar credit rating, and you want to improve it, there are three easy things that you can do.

#1. By far the most important, don't ever miss any payments. Even if you're in the undesirable position of only being able to make minimum payments, you must be sure to make them. Nothing will lower your credit score like delinquency on debt, and if you're in the habit of missing payments, you'll never get ahead. It's absolutely imperative that you at least tender a monthly payment on all debts outstanding that you have.

#2. You should keep the gap between available credit (i.e. your credit limit) and the amount of credit you use as wide as possible. If you're allowed to borrow up to $5000 and you max your credit cards at $5000, you will not be seen as someone with a handle on your finances. Instead, you should get in the habit of spending less than $1 for every $5 in available credit, because your ability to resist using your total credit limit will make you seem like a better risk in the eyes of creditors.

#3. Keep a handle on the number of credit cards outstanding that you have. It's perfectly okay to have a Visa, Mastercard, and American Express card, but when you start to have a credit card from every department score that you frequent, you start to have problems. Odds are, if you a Uncle Jack's Liquor store card, you have too many. 

This is the most straightforward way to start rebuilding your credit.