If you have poor credit, there are things you can do to improve your credit score. Here are eight tips to help you repair your credit so that you will be able to get the loan you need when the time comes to buy a car, home, or other item. It can take some time to get your credit score where it needs to be, so it is best to start working on it right away. The worse your credit is, the longer it will take to repair it.

Tip #1: Reduce Credit Card Debt

If you have savings, use it to pay down your credit card balances. A big portion of your credit score is determined by the percentage of your available credit that is being used. If you have $10,000 in credit from various credit cards, your credit score will be higher if you have only used $1,000 or $2,000 of that credit than if you have used $8,000 or $9,000. Maxing out your credit cards will cause you to have a much lower credit score. To increase your score, pay down your credit card balances but leave the cards open and active.

Tip #2: Don’t Charge Too Much at Once

It looks bad if you run up 30% or more of a credit card’s balance in one month. If you must use a lot of credit in a short period of time, try to spread it out between several different credit cards.

Tip #3: Be Careful with Balance Transfers

Balance transfers can be great for saving money on interest. However, if you transfer your credit card balance to a card that has a lower credit limit, you could actually end up reducing your credit score because you are now using a higher percentage of your credit limit.

Tip #4: Keep Old Accounts Open

Old credit card accounts should not be closed. Instead, charge a small amount on each card every month and pay it off promptly when the bill arrives. This will create many on-time payments on your credit report, which will help to raise your credit score.

Tip #5: Correct Mistakes

Examine your credit report at least once per year to check for errors. If there is anything on your report that shouldn’t be, dispute the item and ask that it be removed. You should request copies of your report from all three major credit reporting agencies and dispute any errors you find.

Tip #6: Pay on Time

This is pretty obvious, but the more on-time payments you have on your report, the better. Even if your credit is very bad now, if you start making your payments on time, you will eventually have nothing but positives on your credit report. Each on-time payment helps get you a little closer to a good credit score.

Tip #7: Avoid Excessive Applications

When you apply for a lot of credit at once, it can damage your credit score. Instead of applying with multiple lenders for the same loan, compare rates and fees first and pick one to apply with. Don’t apply through any other lenders until you know whether you have been approved by the first.

Tip #8: Get a Bad Credit or Secured Credit Card

If the only card you qualify for is a bad credit or secured credit card, go ahead and apply for it. If used wisely, these cards can help you rebuild your credit. Every time you pay the bill on time, you will be adding another positive item to your credit report. These cards usually have very low limits, but once you have been using them for several months, you may find that you are able to get another card with a slightly higher limit.

It is no surprise that people who have a poor credit score have trouble securing financing for loans, mortgages, and credit cards. Lenders can look at a person’s credit history to see whether it appears that the person is likely to pay his or her payments on time each month. If you have not kept up with your payments in the past, most lenders will not want to take a chance on you. That is why people with poor credit have so much trouble obtaining financing.

Negative items on your credit report are not all weighted equally when it comes to determining your credit score. Late payments will affect your score much less than charge-offs, and you will experience a much larger drop in your credit score if you have a bankruptcy or foreclosure listed on your report. The more serious the offense, the longer it usually takes for the negative effect on your credit score to wear off.

Credit Repair Benefits People with Good Credit Too

Even though people who have low credit scores stand to gain the most from credit repair, you can save a significant amount of money by improving your credit score even if you have good credit. By getting your credit score into the excellent range, you can qualify for the absolute best interest rates and loan terms, thus saving a significant amount of money on the cost of your loan.

Fixing Errors on Your Credit Report

Just because credit reporting agencies have an enormous amount of control over your ability to get financed doesn’t mean they always get everything right. Many credit reports contain mistakes that bring down the consumer’s credit score unjustly. The only way to combat the appearance of erroneous information on your credit report is to monitor your reports regularly and be diligent about disputing any information that appears to be incorrect. All you have to do to dispute the validity of an item on your credit report is write a dispute letter. This is fairly quick and easy to do, and it can make a big difference in your credit score.

Make Your Payments on Time

If you want good credit, you should never pay anything late. That is much easier to say than to do, but it is the only way to get a truly outstanding credit score. Don’t take on more debt than you can afford, and always pay everything on time. Do this, and eventually you will have nothing negative left on your credit report.

Rebuild Your Credit More Quickly

In order to raise your credit score as quickly as possible, you need to make sure you have open accounts that are being reported monthly so that the number of on-time payments appearing on your report is constantly increasing. If you don’t have any open credit card accounts, apply for a card and pay it on time each month. Even a secured credit card is better than none because the payments you make will help improve your credit score as long as they are paid on time each month.