Repairing Bad Credit

Teenagers often live by an old adage: "it's easier to ask for forgiveness than for permission." While this philosophy may yield pleasing results when dealing with curfew, it doesn't quite cut it when it comes to dealing with your credit. It's so much harder to "ask for forgiveness" in the credit world than it is to just start out on the right foot.

If your credit is damaged there are ways you can work on improving it, even if it's really bad. In many ways, repairing damaged credit utilizes the same basic principles you should follow when you start off with good credit. In order to keep your head above water you need to learn how to control your money and you can start doing that today.

Whether you're just building good credit or working on fixing poor credit, you can always improve your credit by paying all your bills on time. If you can get in the good habit of always making on-time payments, credit agencies and creditors will take notice and your rating will improve. By paying your bills on time, you can establish your financial responsibility and show you're good for your fiscal word.

Obviously you should avoid major financial blunders like bankruptcy—a very bad plan. Major fiscal errors stay on your credit report for years and it takes a long stint of excellent credit behavior to have significant blemishes removed. You should cut down on your credit cards. Use one or two low key cards to build your credit back up, but make sure you stay on top of those and don't let them get you into more trouble.

Another good move to make is to call your credit card companies and ask them to lower your credit limit; a low credit limit looks good to investigating agencies. You can also take out a minor loan and have someone with good credit co-sign with you; this way you can piggyback off of someone else's good credit to help get yours up. The risk involved with this, though, lies with the co-signer—you need to stay true to your word to make sure the co-signer can maintain his good standing.

The key to repairing bad credit lies in establishing good habits and taking it one step at a time. If you start managing your money wisely, even if you're currently in dire straits, then you'll eventually come out in good standing and leave bad credit behind.