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Top tips to get out of a bad credit history situation

Updated on July 15, 2011

Many people use credit cards for a number of reasons and purposes. While the use of credit cards makes things easier, they can get quite out of hand if the payments are not made regularly. Many a time people end up missing out on the outstanding amounts payable or due dates due to some miscommunication. This can be quite an expensive mistake as it will affect your credit scores negatively. Credit cards should be used with caution no matter what your needs to avoid bad credit history. This is not to say that once you have bad credit history, the situation becomes irrevocable. Rather with careful planning you can come out of the crisis.

Correct your mistakes

When you have bad credit history, make sure that you contact the right people for assistance. Start by ordering a copy of your credit report which will tell you where you have missed out on the payment and what you can do to correct things. The next step is to ensure that all the entries in the credit report are valid and correct. Many people don’t realize that they are entitled to one free copy of their credit report in a year. Always keep the receipts of your credit card purchases so you can validate them at a later point if need be. On occasion an incorrect entry can be due some goods or services that were returned. Ensure that you verify this with the credit bureau first.

Don’t close the account

When you are in a bad credit history situation, you need not immediately close all your credit card accounts. Closing a really old credit card account will in fact do you more harm than good. Keep it open and work out ways by which you can cut down on expenditure and close the amount that is owed on it. Many people find that they have trouble keeping track of multiple credit card payment dates and interest rates. Look for a balance transfer option that is interest free so that you can proceed with closing the amount you owe without any complications.

Credit card users experience bad credit history at some point or another due to a mistake they made or sometimes from an error on part of the bureau. Don’t lose heart if you are in a bad situation as things can be fixed if you persist in your efforts to set it right. With time and consistent payments made by the consumer, many a bad credit history has turned into fair and even excellent credit scores.


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