Business & Finance Personal Finance

How to Build Bad Credit Up

    • 1). Apply for secured credit. A secured credit card requires a deposit (unlike an unsecured credit card). However, it gives consumers struggling with poor credit an opportunity to build up bad credit. After making timely payments, your credit score will increase after time. You might also be offered an unsecured credit card after building a positive track record.

    • 2). Pay bills on time each month. Paying bills on time makes up a large percentage of your credit score, according to MSN Money. Consider setting up automatic payments through your financial institution's online bill payment function. This ensures creditors get their money on time each month and your credit score improves.

    • 3). Manage credit card balances carefully. Carrying high credit card balances negatively effects your credit score, according to MSN Money. Keep credit balances less then 35 percent of the total available credit. For example, if your balance is $1,000 don't carry a balance larger than $350. Use your credit cards for the sole purpose of boosting your credit rating.

    • 4). Keep old credit card accounts open. As you build credit, it might be tempting to close old credit card accounts. However, according to MSN Money, keeping these accounts open positively affects your credit rating. It shows the credit bureaus you have restraint when using credit cards.

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