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As you begin to repair your credit, it is super important that you stay focused on the positive aspects of your credit file. If your credit report has little to no positive qualities, then it’s time to create some positive attributes. All aspects of your credit history are taken into consideration when crunching those final 3 numbers that make up your credit score. Lenders use your credit score to determine how much of a financial risk you are, which ultimately determines your approval or denial. There are a multitude of underutilized credit enhancing secrets that if applied correctly, add positive entries to your report and your score.

• Apply for Credit: The only way a lender can assess your ability to handle credit is by looking at your prior track record. If your prior record has little to no positive activity then it’s that much harder to convince a lender you are credit worthy. Therefore those without should start with a low limit revolving credit card. Obtain the credit card and use it responsibly.  If you are not qualified for a traditional credit card, open a secured credit card, it has the same amount of credit improving ability as any other type of credit card.

• Be Responsible With Your Credit: It is essential that you open credit cards when you are able to make timely payments. The whole idea of opening credit is not only to build your credit history but also to show that you are responsible and make timely payments. In addition to making timely payments, you must also be aware of one of the most important concepts in credit: the debt to balance ratio. The balances of your credit cards are very important in dictating your credit score each month. There are five levels to keep in mind when it comes to your balance: 20% 40% 60% 80% and 100% usage. You never even want to consider coming close to using 100% of your balance. It shows your lender and the credit bureaus that you do not have much cash, you are not financially stable and may not be a good risk in the future. Using up to 45% of your balance has a neutral effect on your credit score, doesn’t hurt your credit score while the lower levels improve it. Using less than 30% demonstrates responsible spending habits and raises your credit score. The higher percentages have an extremely detrimental impact on your credit score, and maxing out your credit card, can cause your score to drop 100 points or more!. Use your credit, but make sure you use it in a balanced way.  Using credit in sensible way, is one of the best ways to get your credit back on track!

• Get The Right Kind of Credit: Opening new lines of credit is important in building credit and raising your score, but know that all credit is not the same. All credit accounts do not do the same thing for your score, different types of credit accounts can impact your credit score quite differently. Store credit cards for example do not carry the same credit improving potential as other cards, and can even harm your credit when your profile is loopsided with too many of these type credit lines. It is best that you stick with major name credit cards: Discover, Visa, Mastercard, AMEX etc. Auto loans also do not have the same potential as credit cards. Remember that credit card debt is also known as revolving debt and is one of the best credit repair strategies used to raise scores quickly. It is constantly updated with monthly payments. Monthly payments and balance statuses show if you are being financially responsible or in danger of falling into default.

Use these credit repair and credit building strategies wisely and you will quickly see the results of your labor. If you are having a hard time grasping the concepts outlined above, do a bit of research and arm yourself with more knowledge. Your credit rating is one of the most critical aspects of your overall financial well being, so it’s definitely worth the time and effort to utilize a variety of techniques to increase your credit score.

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