Strategies for Repairing Your Credit Rating

It is always going to be more difficult to increase your credit rating than it was to damage it, but it is possible. Your score will have been lowered in the past by late payments or not paying at all.

Bankruptcy also adversely affects your credit rating and it takes years to get those black marks off your score. If you have a lower score, you will pay higher interest on credit cards or any loan.

Credit scores are compiled using information collected by three major consumer credit agencies. Each agency calculates their scores a bit differently than the others so your scores are probably slightly different with each agency.

In order to raise your score, you need to know if the information they have on you is accurate and up to date. You can find this out by getting a free report every year at AnnualCreditReport.com. This site was set up by the federal government ensuring everyone can get a free report of their credit history.

Other companies will charge you for this service, so read the fine print carefully - even if the company says it's free.

Read carefully through your report and look for errors that you can prove are not correct. Are there accounts listed that are already closed? Or missed payments listed that you know you made?

Also check for identity theft - has someone else been racking up bad credit on your name? You can get your FICO score by paying $15.95 to MyFico.com.

There is no magic formula to raise your credit score but there are some things you can do. Most important is pay your bills on time. More than a third of your FICO score is based on your payment history. How often and if you are late paying credit card bills, mortgage and student loans affects the score.

If you are really late with your payments the worse it will affect your score. Closing these accounts after they are paid off doesn't erase the score either; nor does it make the score raise any faster.

Your Score is also affected by your total debt. Switching debt to new credit cards has no affect, the debt needs to be lowered. The amount of your total allowable credit you are using will affect your score.

Length of time you have had credit and how many accounts you have is a factor. If you are a new credit holder having only a couple of accounts is a good idea. You need to prove you can pay off your amounts to build a good score.

About The Author Jared Wright is the webmaster of Clivir.com where people meet to learn from one another on topics such as debt relief. You can follow the links to find more related articles such as what is debt consolidation and credit card debt relief.