A lot of people want to have a good credit fix, but there is a lot of misinformation out there about fixing credit.  How do you fix your credit?

This article will discuss the fundamentals that go into your credit score.  If you want to get a credit fix, the most important thing is to pay your bills promptly.

That is the biggest factor that goes into it. What we see is, a lot of people sign up for these services to improve their credit score and they don’t pay their bills on time, so they fix their credit score and they wind up and back in the same place at the same time. So it’s crucial that you pay your bills punctually.

The second fundamental of a credit fix, which you can’t do anything about, is the length of your credit history.  This is important because you do want credit cards that you’ve had for a while. If you do have credit cards, you’ll want to keep those for a while. You don’t want to keep on applying for the new thing because it’s flashy or has low interest rates.

So build up some history. You can’t have too much of a history if you’re young, but you’ll be able to build it up as time goes by.  The length of your credit history will let banks and lenders know more about you, and if you’re going to be a good credit risk for them.  If you are, it’ll be easier for you to get a credit fix.

The other thing is how much money that you are spending as a percentage of what’s available for you. Let me explain. Let’s say you have a $1,000 credit limit. Your credit score is going to look a lot better if you only have $500 of that credit used up as opposed to if you have $999 with that credit.

Because obviously, if you have $500, you’re demonstrating that you can manage your credit better than somebody who is maxing out all their credit cards. So typically as a rule of thumb, you want to have less than fifty percent outstanding balance as a percentage of your credit score. You’ll be able to fix your credit more easily.

The other big thing is, how often are you applying for credit?  The biggest killer of credit scores that we see a lot of times is the store credit cards.  You get ten percent off for signing up today with these credit cards and you wind up having people with $100,000 of credit card debt on these credit cards.  If you want to improve your credit, stay away from these store cards.

And then mix is very good.  A mix of credit cards, installment loans, mortgages, and car loans is what lenders want to see.  They want to see if a person can handle the credit.  So if you’ve got a good mix, you’re demonstrating that you’re handling the credit well.

These companies make their money in lending, so it’s better for them to give you a loan than to not give you a loan.  But of course, it’s best for them to give you a loan that you will pay off. They’ll prefer to work with people who are less risky.

Keep these fundamentals in mind and you’ll find yourself with a good credit fix and improving your credit score very easily.