A credit score is an indicator of a person’s ability to pay off his debts and is crucial for gaining approval for borrowing from creditors. Maintaining a good credit score is a quintessential aspect of developing a healthy financial lifestyle. The benefits that result from good credit scores include increasing your chances of getting approved for a loan or credit card. The interest rates charged on said loan or credit card are also low on account of a person’s good credit score.

A person is allowed to borrow more, acquire more bargaining power, have the option (under certain situations) to not pay up security deposits and have higher chances of finding accommodation on rent and better car insurance rates. If the following steps are followed diligently, a person’s bad credit score can improve drastically over time:

Regular Repayment
Scoring systems that determine a person’s credit score, such as Vantage Score and FICO, factor in how often the person in question has paid off his or her debts entirely. Repaying all forms of debt on a timely basis is a good indicator of responsible usage of credit.

Not Abusing the Limit
for those who don’t know how to improve a bad credit score, it is important not to reach the maximum borrowing limit all the time. Available credit must always be compared with the available balance to make sure that there is no excessive borrowing. Credit Scoring systems use the credit utilization rate as one of their primary criteria in determining credit scores.

Letting Paid Debts Remain on Record
People are usually waiting to wipe off any debt off the record after paying them off in the hope that it will improve their bad credit score; however, having paid off debts on record is more indicative of a person’s responsibility rather than having a lack of debts on record. This does not indicate the likeliness of a person paying back debts. As long as the debts are paid off on time, it can increase credit scores if kept on record as opposed to closing their accounts.

Patience and Consistency
All the changes and improvements someone has to make in order to reach the peak of credit value cannot be achieved in a week or two. To get the best credit scores possible, it can even take a decade or two. The important thing for anyone to do is to make long term plans and witness how a bad credit score improves over time.

Screening Credit
There is no cause for worry when someone reviews his or her own credit. It is considered a soft inquiry and does not impair the credit score even temporarily (unlike hard inquiries). Now, this will help a person in understanding the current financial state he or she is in, whether the person needs to prioritize one repayment over others, whether there needs to be a change in approach and most importantly, how much her credit score has fluctuated from the previous review and also spot identity theft.

These tips will help anyone with a bad score know how to bring their credit back to an acceptable number.