Why An Individual Can Have A Bad Credit Score

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Ways to start rebuilding your credit score

There are many reasons why an individual can have a bad credit rating. Common reasons include a loss of employment , medical bills and a divorce. Whatever the reasons are in your life, if you have gone through a period of time in your life that has left you with a bad credit rating, there are several things you can do to begin to build your credit rating back up.

First understand the major factors used to calculate credit ratings
Although there are different ways a lender will calculate a credit score, the basic credit score that people use is called a FICO score, and this is developed from four criteria. One is payment history. This is followed by your credit to debt ratio, and the final two are the length of your credit history as well as the type of credit you have. In order to build up a better credit rating, you will need to address issues that relate to these four factors.

Look at your credit report
The first thing you need to do is look at your credit report. There is really nothing stopping you from doing this because your can get a Free Credit Report. Once you get your report, you need to sit down and look at it carefully. There are, however, three credit agencies: Equifax, Experian and TransUnion. It is possible that your credit report could be different from one agency to the other. This is because not every lender reports to all three agencies, but even when they show differences, overall, they will be close to each
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