Build & Repair your credit score

A poor credit score can have a very negative effect on your life. Not only can it prevent you from getting loans in the future. It will also force you to pay a higher interest rate on the loans you already have than someone with a better credit score might have to pay. It is therefore more than worth to make the effort to improve your credit score. It is an easy way to build a better tomorrow.


Building a better credit score is not something that can be done over night. This is especially through if you already have a poor credit score with several missed payments and a lot of loans. It will take time to build a good credit score but if you make the effort you will be able to see a steadily improved credit score. You can often start to see positive effects as soon as 30- 60 days after you start working on improving your credit score.

Lets start by looking at some of the factors that have very negative effects on your

Delinquent payments

Outstanding missed payments have a negative effect on your credit score. One of the first thing you should do if you want to start improving your credit score is therefor to make sure that you start paying all your bills on time and that you pay any outstanding bills that you might have that haven’t been paid yet. You might be forced to cut back on other things to be able to do this but it is more than worth it. Not only will your credit score improve if you pay of old debts but you will also feel a great sense of relief when you no longer have these old debts hanging over your head.

If you feel that a outstanding bill is erroneous you should not pay it. Instead you should dispute it along with any other bills that you believe have been sent to you in error. Several different companies such as EquifaxExperian and TransUnion makes it possible to dispute bills online. Disputing bills that you feel are erroneous is a quick way to start rebuilding your credit score. If you do not dispute or pay these erroneous bills they will stay with you and impact your credit score for a very long time.

If you have large overdue bills it can be good to contact the company that you owe money and see if you can not negotiate a solution. In many cases it is possible to negotiate a solution where the company forgives a part of the debt if you pay the rest right away. It might also be possible to negotiate a payment plan that removes the bill from your delinquent payments and allow you to pay the debt as a number of smaller payments. It is very important that you follow any payment plan you make with the company. The deal you made with them is usually void if you fail to pay as per agreement. This is true regardless of whether the debt can be traced from a credit card, an unpaid rent payment, a utility or another purchase. Most unsecured credits where the creditor haven’t gotten paid in a while can be negotiated. Even if you are up to date with the payment it might be possible to call the company to renegotiate the payment plan.

Even if you start to pay your debts on time it will take time before your credit score is completely free of you past sins. Delinquent payments stays on you records for seven years. Unpaid taxes and some other government fees stay on your record for 10 year.

This shows how important it is to make sure to pay your bills on time. One single missed payment can stain your record and prevent you from realizing your dreams for 7 to 10 years.

Always refrain from taking on more debt than you can pay.

Too high debt

credit cardsHigh debt is one of the most common reason for low credit scores. There is no simple solution to high debts. The only solution is to start paying of the debt.  Do not move the debt around. That will not help you in the long run. You will need to make a budget that allow you to reduce you debt to a more manageable level. It is very hard to have money left at the end of the month to use to pay of your debt. It is therefore often better to decide that you should reduce you debt by a certain amount each month and then pay of that amount at the beginning of each month. You can usually do without the money if you do not have it, if it already have been used to reduce your debt even though you never have any money left at the end of the month.

If you get a raised salary the debt will become lower in comparison to your income and this can help you improve your credit score. In some cases it can be a good idea to apply for more credit cards and for raised limits on your credit card. If you qualify for more credit cards or a higher limit you can improve your credit score without having to pay of your debt. Having unused available credit space improves your credit score.

If you have a low credit score it can be good to pay down the debt  amount to maximize the available credit and improve your credit score.

Other things that have a negative affect on your credit score

There is a number of other things that can affect your score negatively and that you should be aware of to be able to factor in the effect different decision can have on your credit score. Below you can read more about some of the factors that can effect your credit score besides delinquent payments and carrying to much debt.

  • Bankruptcy – I am sure that no one is surprised to hear that a bankruptcy will affect your credit score and it can take a very long time to rebuild your credit score after declaring bankruptcy. This is something you should consider before filling for bankruptcy. In some cases it can be better to try to suffer through things and get through it without the blank slate a bankruptcy can give you.
  • Closing Credit Cards – It is sometimes recommended that you should collect all your debt and close the others to improve your credit score. This is a really bad idea. Closing credit cards can give you a short term boost in your credit score but will have a a negative effect in the long run. It is better to keep several cards with a small debt on all of them than it is to use most of the space on a couple of cards. This is due to the fact that your credit score will be affect by how much of your approved credit you have actually used. By reducing your approved credit you will increase the percentage used and lower your credit score.

    It can to the contrary often be a good idea to apply for new credit cards and try to increase the limit of those you have to improve your credit score. A common reason for recommending that you collect all debt on a couple of cards s that you reduce the number of bills you have to pay each month. It is not unusual that the total amount due each month also can be lowered by collecting your debts on one card. This makes it easier to pay of your debt but does not improve your credit score. Leaving the debt spread out on different cards is usually better for your credit score.

  • Having to many credit inquiries – The number of inquiries you have on your record will have effect your credit score. If you have too many the score will be lowered. You should therefor avoid applying for credit or doing other things that require a inquire too often. The inquiries only stay on your record for two years and if your credit score is lowered due to too many inquiries it will take a maximum of two years to improve it if you refrain from getting new inquiries.

Improve your score by taking on new debt

It can seem strange but sometimes you can improve your credit score by taking on new debt. It is often possible to improve your credit score by taking out new types of credit. You might buy an appliance on a payment plan or take out a small personal loan. This can give you a small boost if you do not already have these types of credit. You should only take on this debt if you are certain that you can repay it without problem.