Credit Score Composition
In the United States, the single most popular measurement of your credit rating is the credit score put out by FICO. As a result, fixing your bad credit means picking up a copy of your FICO credit report, using it to identity the problems with your creditworthiness, and then correcting those problems at the source. Keep in mind that you are entitled to receive a free copy of your credit report once a year by going to the FICO website and filling out a request form.
FICO calculates its credit score using five separate but often inter-connected components. Presented in order of descending importance, these five components are your payment history, your amounts owed, the length of your credit history, the types of credit that you are using, and whether you are seeking to secure additional credit.
How to Fix Your Bad Credit Score
You can build a good credit score by simply making sure that all of your payments are made on time, that you do not borrow to the limits of your available credit, that you use a mixture of credit, and that you do not close forms of credit that you’ve been using for a long time.
In general, changing your credit score is simple but time-consuming provided that you stick to these practices, with exceptions existing mainly due to reporting errors that can be corrected in a short period of time. As a result, you should always take care to confirm that the events listed on your credit report are accurate in case your credit score is suffering because of something that never happened.