How to Repair Bad Credit Fast!

When you are trying to repair bad credit, what you are essentially looking to do is to raise your credit score. This is called your FICO score. Low FICO scores means that a person is high risk and therefore, lenders are not generally very eager to give you a loan or they will charge you higher interest rates. If you have a low FICO score, there are things you can do to raise it and improve your credit.

Payment history makes up 35% of your FICO score. So it makes sense that the biggest thing you can do to raise your credit score is to make your payments on time. The later you are paying off your mortgage, student loans, and credit cars, the more your FICO score is negatively affected. You may think that closing an account once the late payments have been cleared up will help raise your score faster. This is not true so only close it if you really don't want to use that account anymore.

Length of credit history makes up 15% of your score. This means that lenders want to see a history of payments made on time. So even if you have had your credit for a long time, opening new accounts could hurt your score. By the same token, closing old accounts could raise your score because it shortens the length of your credit history.

How much you owe makes up 30% of your score. The only way to fix this is to pay off your credit cards and other loans. Moving your debt around won't help as it's the total balance that creditors look at. Creditors also look at how much of your borrowing rights you are using. This means if one of your credit cards is at it's limit and you are only making your monthly minimum payments, you are still at risk to have a low FICO score.

10% of your score is based on new credit. For this reason, much like the reason listed above, opening a lot of new accounts could hurt your score even if you're making timely payments on all of them.