Before we go any further, let's start right off talking about two of the most important things to do in order to maintain a good credit score and make sure you know them before you even start to improve your credit. Read #1 over and over again and never forget it, that always ranks as the key to keeping up a great credit score.
Pay all your bills on time. Late payments, collections, and bankruptcies have the greatest negative effect on your credit score. If you have not paid credit items on time in the past do not let that stop you from changing you ways. The sooner you get things on track the faster you can repair bad credit. From the point of view of the credit reporting bureaus you may want to note that 'late' usually means 30 days late. This means your goal should be to pay things before the due date, the next best choice becomes avoiding the late fee date, perhaps at 10 or 15 days late. The most important date for avoiding a bad credit report starts with missing a payment by 30 days. If you can't afford to pay everything on time you may want to read Who to pay when you can't pay everyone or other materials at Bankruptcy Alternatives - Debtor's Options.
Give yourself time
Time is one of the most significant factors that can improve your
Establish a long history of paying your bills on time and using credit responsibly. You may also want to keep the oldest account on your credit report open in order to lengthen your period of active credit use. On the other side of things the phrase 'time heals all wounds' applies perfectly to a bad credit report. From the moment a negative credit event ends the toll the incident takes on your credit score begins to diminish. To be sure, first understand that this healing does not start until the event has closed. Let's take the example of an unpaid credit card. If you ignore an account the creditor at some point 'charges it off', this does not mean that you don't owe it anymore or the the incident is over. An unpaid charge off in this context would be an open wound that will not heal. Dealing with debt by not paying creditors rarely emerges as one's best option. Paying an account off or getting current marks the moment when healing can begin, even if you reached a settlement for pennies on the dollar. How fast your credit gets better with time depends on how bad it got, but you will start to see things improve within the first year. By 2-4 years expect a serious raise in score and by 7 years the negative credit item should be gone.
We will proceed in this guide to walk you through parts of this process, provide further education and help you build a strong foundation for a long future of great credit!
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