What is Bad Credit? All of your financial decisions do have an impact on your credit report and your credit history. The combined history on your credit report is your credit rating. Your credit rating is affected by many things such as if you pay your bills on time, the number of credit cards that you have, the number of larger loans that you have, and the amount of credit that you have available but unused. Additional factors that affect your credit rating are, if you have a telephone in your name, how long you have lived in you home, how long you have been at your job, and if you have ever declared bankruptcy. All of these factors fit together to report if you are a bad credit risk or not. A bad credit risk is someone who has not fulfilled his or her financial obligations either presently or in the past. When you are behind on your payments by thirty days and you have no exceptional reason, you will be considered a bad credit risk. If you have declared bankruptcy in the last seven years you could be labeled as a bad credit risk where you will find it difficult to obtain a loan. Unable to get a loan, credit card or other credit line because you are labeled as a bad credit risk? There are steps that you can take to rebuild your credit. First off you should start making payments on any account that is over due. Call the creditor and tell them your situation, usually they will bring your account up to date with a payment and a phone call about why you are behind. When you fail to make a payment, plus you don't contact the creditor, the situation only builds to a worse position for you. Make an effort to contact your creditors when you are laid off from work, when there is a medical emergency in your household or if you have other problems meeting your bills, many times you could be covered through special provisions on your credit lines that protect your credit in these situations. Another method of reviewing your credit is through your credit report, where you will need to review each account line by line and inquire with these creditors why you are listed as past due if you are not, and have them update your account if you are current with your payment. Going through your credit report line by line will also show you if someone if using your personal information and your credit as their own. Because all entries made into credit histories are completed by a human some where in the chain of data entry, it is possible that an account could be listed on your credit report that is not yours and you can have these accounts removed by the credit reporting agency where you obtained your credit report. Three Methods to Rebuilding Credit Start making payments on your past due accounts bringing your accounts at least up to current status Call your creditors and tell them what your payment problem is, would a payment date change solve the problem? Most companies will allow this change if you contact them by telephone. Stop using your credit cards and start paying for cash until you can get your finances in line. Bankruptcy and Repairing Your Credit When you have declared bankruptcy you have either wiped out all the bills that you owe, or you have agreed to make payments on the bills that you owe - which ever type you have declared, you will have difficulty getting additional credit lines for purchases that you want to make. You can rebuild your credit by making your payments on the outstanding accounts as you have agreed through bankruptcy. You can also rebuild your credit by keeping household utilities in your own name and paying these bills that are kept in your own name. Staying at your job while you are rebuilding your credit is an important item that creditors will look at when you apply for another line of credit, just as how long you have lived at your current address is important factor in weighing whether you are a candidate for additional credit. If you have declared bankruptcy it can be very difficult to obtain a new credit card, but through a secured credit account, you can rebuild your credit. Even if it takes you six months to put five hundred dollars into a savings account so that you can be issued a credit card on this account, the long-term advantage will be that you have opened a new credit line. Paying on this secured credit line as you make purchases will also show that you are more responsible with your money and your bills than you previously had been. While you will continue to watch your credit rating and pay your bills on time over your life time, you will also find that purchasing a home, a car, a new living room suite, or taking out a personal loan for school will be much simpler when you have stayed on top of your credit once you have obtained a good standing.

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