Credit Restoration & Education

Credit restoration and increasing your score by 100 points or more takes effort and time. Credit scores are important because they determine whether you can get financing. Lenders pull credit reports and check personal scores to determine your payment history. Poor records result in higher finance fees and rejections. But you can reverse credit problems and restore your personal file.

Improve Payment History

Your bill management is one of the biggest determining factors in your credit rating. Late payments lower your credit score, and a history of lateness makes the ability to secure financing tougher to accomplish. Thirty-five percent of your credit score accounts for payment history, and restoring your credit requires you to alter the habits that negatively affected your credit score. Know your due dates and keep credit card and bill statements organized. Pay bills a few days before the due date to make sure creditors receive payment by the cutoff date. Use online payment systems or set up automated payments for convenience.

Dissolving Debts

The second biggest factor in credit scoring is the amount of debt your owe. Debt accounts for 30 percent of credit scores. Because high balances due to maxed out credit cards can dramatically lower your credit score, restoring your rating necessitates creating a plan to eliminate debt. Paying more than the minimum on credit cards and avoiding new loans or debts can help you control balances and increase your score.

Limit Credit Inquiries

Seemingly minor credit moves such as applying for a new line of credit can also impact credit scoring. Each credit application submitted sheds points off your credit rating. Credit restoration includes limiting your number of personal inquiries, and only applying for credit when necessary. Credit inquiries and new credit accounts influence credit scores by 10 percent.

Reversing Bankruptcy Damage

Because a personal bankruptcy can tarnish credit reports for 10 years, building your credit after bankruptcy is imperative. Credit scores can drop 100 points or more after a bankruptcy, and regaining these points call for opening a new line of credit and managing this account without incident. A tip to manage a new account is to paying off credit cards in their entirety each month. Rebuilding credit after bankruptcy is a gradual process, and the rate of recovery varies for each person. But as you make payments to creditors, your score will slowly improve within months, and you may qualify for a mortgage loan within 18 to 24 months.

Credit Counseling

Not everyone has the instinctive ability to manage credit, and not everyone takes a class in personal finances. If you're unable to improve credit due to poor credit choices, enroll in credit counseling. This service provides education in personal finance, and counselors will help you learn how to budget money, control spending and repay debt. Non-profit organizations do not charge a fee for their services. An online search can provide information on credit counselors, such as the National Foundation for Credit Counseling, Springboard Credit Counseling and CredAbility.