Bad Credit Help...

Do You Need Bad Credit Help
By Jeff Schuman

Do you need bad credit help? Are you one of
thousands with no credit and no collateral to help secure
approval, or you just have extremely bad credit and no one wants
to help you, and all you hear is stories and more stories?

Bad credit is a term used to describe a poor credit
rating. Common practices that can damage a credit rating include
making late payments, skipping payments, exceeding card limits
or declaring bankruptcy. Bad Credit can result in being denied
credit. 

Bad credit can result in a negative rating from the
credit reporting agencies. Many factors can contribute to
someone getting a "bad credit" rating, among these are
non-payment of an account or late payments over an extended
length of time. Whether non-payment of an account is willful or
due to financial hardship, the result can be the same, a
negative rating which will result in a low credit score.
However, lenders are more willing to work with individuals if
the person contacts the lender to let them know they are having
problems meeting their commitment to pay.

A credit score is defined as a statistical method of assessing
an applicant's credit worthiness. An applicant's credit card
history; amount of outstanding debt; the type of credit used;
negative information such as bankruptcies or late payments;
collection accounts and judgments; too little credit history,
and too many credit lines with the maximum amount borrowed are
all included in credit-scoring models to determine the credit
score.

Raising your credit score is possible. It's a well known fact
that lenders will give people with higher credit scores lower
interest rates on mortgages, car loans and credit cards. If your
credit score falls under 620 just getting loans and credit cards
with reasonable terms is difficult.

Here are five things that you can use to raise credit score.

1. Correct obvious mistakes.

Your credit score is what shows up in your credit report. Review 
your reports from all three credit bureaus for accuracy once a year 
as well as several months before applying for a loan. Changing a 
mistake on your report can take 30 days to three months, or more. 
Get Your credit report from the three major bureaus: 
Experian, Trans Union and Equifax. 

2. Pay Your Bills On Time

Your payment history makes up 35% of your total credit score.
Your recent payment history will carry much more weight than
what happened five years ago. 

Missing just one payment on anything can knock 50 to 100
points off of your credit score. 

Paying your bills on time is the best way to get started
rebuilding your credit rating and raising your credit score. 

3. Reduce your credit card balances.

A heavily weighted factor in your FICO score is how much money
you owe on your credit cards relative to your total credit
limit. Generally, it's good to keep your balances at or below 25
percent of your credit card limit, said Jeanne Kelly, founder of
The Kelly Group in Brookfield, Conn., which helps clients
improve their credit scores.

4. Don’t Close Old Accounts

In the past people were told to close old accounts they weren’t
using. But with today's current scoring methods that could
actually hurt your credit score. 

Closing old or paid off credit accounts lowers the total credit
available to you and makes any balances you have appear larger
in credit score calculations. Closing your oldest accounts can
actually shorten the length of your credit history and to a
lender it makes you less credit worthy. 

If you are trying to minimize identity theft and it's worth the
peace of mind for you to close your old or paid off accounts,
the good news is it will only lower you score a minimal amount.
But just by keeping those old accounts open you can raise credit
score for you.

5. Avoid Bankruptcy

Bankruptcy is the single worst thing you can do to your
credit score. Bankruptcy will lower your credit score by 200
points or more and is very difficult to come back from. 

Once your credit score falls below 620, any loan you get will be
far more expensive. A bankruptcy on your credit record is
reported for up to 10 years. 

The reality of a bankruptcy is it will limit you to
high-interest lenders that will squeeze out high interest rate
payments from you for years. 

It is better to get credit counseling to help you with your
bills and avoid bankruptcy at all costs. By getting credit
counseling instead of declaring bankruptcy you can raise credit
score over a much shorter period of time.