Online applications for a bad credit loan and credit card.

Bad credit - Anyone who has ever applied for a loan or credit card knows the importance of a good credit report score. Negative entries (such as late payments) or errors with inaccurate information can cause a bad credit score and prevent getting a loan to buy a car, buy a house, get a credit card or even open a bank account. And, even if approved for a credit card or loan, a bad credit score often results in having to pay higher interest rates. Review our free tips on how to improve credit scores.

Bad credit entries can stay on a credit report for seven years. Bankruptcy will also be reported from seven to 10 years. So this information has a very long-term effect on your credit.

You can recover from bad credit by taking a careful approach. Start with lower credit and loan limits, and make all payments on time.

Regardless of bad credit or no credit, give our consumer credit network a chance to serve you. Apply for a guaranteed card, short term unsecured loan, debt loan, a new auto loan or home loan, or for refinancing.

Many factors can cause a bad credit report score:

• Applying for a new credit card or loan.

• Frequently carrying over credit card balances.

• Your insurance carrier is late paying your medical bills.

• Slow mail delivery making bill payments arrive late.

• Co-signing a loan which the primary doesn't pay on time.

• Number of open accounts, including inactive accounts.

Life is much easier when you can purchase something you need or want, even when you don't cash on hand. It's also nice not having to pay more just because you are considered a high risk by loan lenders and card issuers. You want the best service at the lowest interest rate. So how do you obtain such perks?

Here are tips for bad credit repair of your FICO score:

• Don't splurge; especially at the wrong times. The bigger your total balance as a percent of your total credit limit across all your credit cards, the lower your score will be. Most credit repair advisors agree that it's best to pay off credit card balances in full each month. But don't forget the delay factor. If; for example, you want to improve your score to increase your chance of loan approval, it can take several weeks or even a few months until your credit card balance payoff is reported to the credit bureaus. To improve your score, don't charge anything for at least 60 days before applying for a loan. That way all payments you've made to date will likely be reflected in your credit score by the time a lender requests it.
   
  Bad Credit Repair Tip Recap: If you can't pay off your total balance in full each month, keep it under 30% of your total credit limit.
  
  

• Make credit payments on time. Late payments for loans and credit cards can severely lower your credit score. When you're 30 days past due and your balance is still unpaid, your credit score could take a 60 point drop. That could result in a much higher interest rate on loans you take out, and even an increase in the interest rate of your current loans and/or credit cards, as well as being rejected on new credit applications. Past late payments you have since paid off will have less and less of an impact on your credit score as time goes on. Past late payments that have since been resolved might result in a loss of 15-20 points.
   
  Bad Credit Repair Tip Recap: If you can't payoff balances in full, pay a little more than the minimum due. Set up automatic online bill payments so you'll never be late, and/or use our free bill payment reminder software.
  
  

• Get multiple good credit references. Your credit score won't be as high as it could be if you have just one credit account. Lenders like to see several active credit accounts, to further assure them you can responsibly manage multiple lines of debt; especially revolving debt such as credit cards, as well as installment debt such as a car loan or a mortgage.
   
  Bad Credit Repair Tip Recap: Consider opening another credit card account, or taking out a personal loan or a car loan.
  
  

• Maintain long track records. Old credit accounts can give you more points than new accounts. Lenders prefer borrowers who have responsibly managed accounts for years, and award more points for creditworthiness than for a new account with a track record of only a few months of perfect management. Credit accounts less than six months could actually hurt your score. Lenders also shy from people who are on a credit splurge and are applying for numerous new accounts or loans within a short period of time. Each time you apply for new credit, your score could take a small, temporary loss. But that's not the case if a broker is shopping around on your behalf to get you the best loan. In such case, if they approach multiple lenders who all pull your credit report, that will only count as one inquiry so long as they all do so within a two-week window.
   
  Bad Credit Repair Tip Recap: Avoid applying for a lot of loans and credit cards within a short time frame.
  
  

• Keep; don't close, approved credit accounts. This tip is often argued amongst advisors. Some think it's best to close unused accounts, as lenders may view those open lines of credit as potential debt, and a potential risk. But here, we will give the reason for keeping unused accounts open... Although it's tempting to close a credit card account when you balance transfer to a lower rate card, such action could lower your score. That's because your total balance stayed the same, but then your credit limit is reduced after closing the unused account.
   
  If; for example, you had two credit cards, each with $4,000 of debt and a total credit limit each of $10,000, and you transferred both of those balances (total of $8,000) to a new card with a $10,000 limit, you'll have a total credit line of $22,000.00 if you keep all three cards active. If you close the two cards that you had transferred the balances from, your line of credit will be lowered to $2,000.00.
   
  Bad Credit Repair Tip Recap: Keep unused revolving credit accounts open even after transferring debt. The higher the ratio between available credit limit and debt, the better your score can be.
  
  

• Fix credit report errors. Even if you pay all bills on time, make good income and have strong credit references, your credit report may say otherwise. Get a copy of your report, review and fix credit report errors you may have. You don't want your credit score lowered due to someone else bad payment history. Another thing to look for and consider, is how well your spouse has been using credit in your name and paying bills for you.
   
  Bad Credit Repair Tip Recap: Order a free credit report copy once a year from each of the three major credit bureaus, and make sure they're accurate. Dispute errors or any bad credit entries that are beyond the debt statute of limitations.

Free Tips on How to Fix Bad Credit

In order to fix bad credit, there are five areas you need to improve on, because these are the areas that make-up your credit score.

• Payment history. At 35 percent of your score, this section has the greatest influence. While you satisfied your collection accounts, you don't specify how many you had, what the balances were, when the delinquency occurred or the date you eventually repaid them. There is a good chance your scores are still low because of the recent, severity and frequency of those delinquencies. You did what you could to fix past damage, now let time (yes, time) work its magic. As those accounts age, they'll have less impact. In the meantime, keep paying your current accounts on time.

• Amounts owed. The debt you owe today affects 30 percent of your score, making this the next most important category. You say you've paid off your collection accounts, but this doesn't necessarily mean that you're debt free. Do you carry a student, personal or vehicle loan? Owe anything to your credit or charge accounts? If you have balances that are high and possibly nearing your credit limit, this could be the section that's keeping your score low. What to do? Concentrate on total repayment.

• Length of credit history. At 15 percent of your score, the amount of time you've had and used credit is less critical than the preceding scoring factors, but it's still worth examining. Clearly, you've been in the credit world for at least four years, but if that's it, you may just not have enough history on your side. Having a long, detailed record of your borrowing and repaying prowess will bring those numbers up. You can't make the years fly by faster, but if you've opted out of using credit, start charging again to build that credit history.

• Types of credit used. Ten percent of your score is based on the variety of accounts you have. In general, it's best to have a good, solid mix of installment loans, credit cards, charge cards and retail accounts. Why? Use them all well and you prove that you can handle the entire range of credit tools. Review your accounts and consider adding another type to the mix if you notice a gap. Mind that you don't go overboard, however. Just apply for what you need and will really use.

• New credit. The final piece of the puzzle also comprises 10 percent of a FICO score and is all about how you pursue new loans and lines of credit. It looks at such activity as the number of accounts you've recently applied for, how many you've opened and how recently you made inquires. Think back, Patricia. Did you complete the paperwork for a lot of new accounts in the recent past? If so, you may have knocked your score down a bit. Slow down and stop applying for a while.

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