Learn How to Finally Repair Your Credit Score

Due to rough financial times, many Americans have faced financial hardships that show when they pull their FICO ratings. However, now that the financial hardships are over for some people, they are ready to start building their credit ratings. But, what are the best ways to build FICO ratings?

The first thing that people 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 Americans 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 credit scores.

Once all the bad debts have been paid off, people 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 credit card account. A secured charge card is just like a regular charge card. The only difference is that when consumers open secured charge cards, they must place a security deposit with the banks before actually being able to use their credit card. So, in a sense the consumers are borrowing their own money and the bank is alleviated of the risks associated to loaning to people with bad credit.

Once Americans open a new secured credit 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 credit 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, Americans show lenders that they are responsible borrowers.

Never spend more than 50% of your credit line: The credit line on a credit 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 FICO scores.