Learn How To Repair Your Bad Credit Score

Due to rough financial times, many people have faced financial hardships that show when they pull their FICO ratings

. However, now that the financial hardships are over for some consumers, they are ready to start building their FICO scores. But, what are the best ways to build credit scores?

The first thing that consumers should do when they start building their FICO scores is get a copy of their credit report. It is impossible to fix something if you don't know what is wrong with it. All people are entitled to 1 credit report from each of the reporting agencies per year for free! This report can be obtained at www.AnnualCreditReport.com. Once people get a copy of their credit report, it's time to start working on paying of the outstanding debts. This may be a time consuming process but is a very important process in repairing bad FICO scores.

Once all the bad debts have been paid off, Americans will start now with a clean slate. It's time now to start the actual credit building process. The next thing that Americans will need to do is open a secured charge card account. A secured credit card is just like a regular charge card. The only difference is that when people open secured credit cards, they must place a security deposit with the banks before actually being able to use their credit card. So, in a sense the people are borrowing their own money and the bank is alleviated of the risks associated to loaning to consumers with bad credit.

Once people open a new secured charge card account, it is important to remember to use this charge card properly. Using charge cards improperly can lead to even worse financial hardships and credit ratings. Here are a few best practice tips for building credit with secured charge cards:

Always send payments at least 2 weeks early: Credit card companies are looking at how people make payments. The more loyal consumers that make consistent payments are less of a risk to the banks and increases consumer credit scores. By making payments consistently 2 weeks early, people show lenders that they are responsible borrowers.

Never spend more than 50% of your credit line: The credit line on a charge card is the amount of money a consumer will be able to borrow using that credit card. However, the credit line is like a trap. It is always there able to be spent at any time. However, more responsible borrowers maintain an open credit line for emergencies. Once over 50% of a credit line is spent, it can show banks early signs of financial hardship which can actually harm consumer credit ratings.

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