How To Work With A Bad Credit Score

It is human nature that people want to enjoy life to its fullest, and sometimes that means they tend to be leading a champagne lifestyle on a beer budget. That can work for awhile, but if your expenditures consistently are greater than the amount of money you are bringing in, this will inevitably have a negative impact on your credit score, and you may find yourself saddled with the bad credit label.

Nobody wants that, nobody plans for that, but it happens. Hopefully by the time it happens or shortly thereafter, you have determined what has caused you to get into this situation and are more knowledgeable about what you can and cannot do from a financial aspect. Armed with that knowledge and vowing that you cannot allow this to happen again, you need to work to correct your bad credit score. Yes, it may take care of itself over time, but if you put some time and effort into getting it corrected, the amount of time that it will take for you to lose that bad credit label will be significantly reduced.

Some people may even ask "why bother" if it will correct itself over time? The answer to that question is that you want to be prepared to take advantage of financial opportunities that may present themselves to you, which you may not be eligible for if you have bad credit. You may not be looking for a new car right now, but if the opportunity presented itself for you to get a new Lexus or Mercedes for 75% off, wouldn't you love to be in a financial position to jump on it?

Also keep in mind that many more things than just your ability to get approved for a great rate on a loan is affected by a bad credit rating. More and more employers are using a person's credit rating as one of the determining factors when they are considering offering a job to a candidate. Insurance companies are also jumping on the credit score bandwagon by insisting that a bad credit rating represents a higher risk customer for them and will charge higher insurance rates accordingly.

Get copies of your credit reports at least annually, and some say even 2-3 times a year and look for things being reported incorrectly. It is a known fact that the majority of people's credit reports have errors in them, and they do not auto-correct themselves. The only way something that is being reported inaccurately ever gets corrected is if YOU dispute the items with the respective credit bureaus. Also note that you need to contact all three credit bureaus, since they do not share information between them, and therefore there are likely different errors with different credit bureaus.

The very best thing you can do to improve your credit score and credit rating is to pay each and every one of your bills on time. Don't wait until the very last minute. If your payment is due on the 10th of the month and you do not mail it until the 8th, chances are better than excellent that this will show as a late payment, since the payment does not count as being "received" until it has been posted to your account.

It is clearly worth your time and effort to maintain a good credit rating, and doing so takes consistent watching of your credit history and profile. But doing so can pay off for you in spades in the future.