When it comes to telling the difference between repairing your credit, and building it, ask yourself which camp you fall into:
Low Credit, or No Credit?
Low credit means a low credit score – which is a bad credit score.
Bad credit scores can hinder you from getting approved for loans, credit applications, and mortgages. Even when you get approved, bad credit scores mean lenders consider you high risk, and your interest rates will reflect that.
Overall, bad credit is something you want to fix as soon as possible.
You repair low credit scores by cleaning up your report. You clean up your report by removing negative items from your credit history.
No Credit means no credit history, no limits, no aged accounts, etc.
There isn’t anything to go off of when a creditor is reviewing your report, and deciding on your score.
Having no credit history can mean just as hard a time when getting lenders to trust you. After all, they have no information to go off of – how do they know if you’re high risk or not?
When you have No Credit, you need to rebuild your credit.
You do this by opening up Primary Accounts, and other lines of credit. You can also add yourself as an Authorized User to accounts with good history.
How do I know if I need Credit Repair or Credit Rebuilding?
For the most part both Credit Repair, and Credit Building will be part of your journey towards reaching your financial goals.
1 in 4 Americans suffer from errors on their reports, which bring down their scores. Those Americans not only suffer from low credit, but after they clean up their report, they’ll suffer from no credit.
When creating your strategy towards better credit, consider this:
“Do I need to improve my score?”
If you’re sitting at a 500 (or below) FICO, the answer is a definitive yes.
And lastly –
“Do I need to build up credit?”
Yes. No matter who you are, you should always be building up your credit. There is no such thing as TOO much credit history (as long as that history is positive), and you will continue to benefit from maximised limits as long as you proactively take care of your credit profile.
All in all, a successful person will have Good Credit, and Good Credit History.
You get Good Credit with a clean report, and positive payment history.
You get Good Credit History from having multiple accounts, which are diverse, have high limits, and have balances under 30% (that is, you’re only using 30% – or less – of your available credit). Any more than that and your Good Credit History will look more like Bad Credit History.
Credit Repair vs. Credit Rebuilding In a Nutshell
Credit Repair is what you need to fix your bad score. And, unless you run into trouble again, is something you only need to do once.
Whilst Credit Rebuilding is something you do, ongoing, proactively, to build up your Credit History, and turn your Credit Profile into a lender’s dream.
The more your Credit is built up, the better the loans you get approved for, the better your interest rates, the easier your big purchases become.
Credit Repair, and Credit Rebuilding come hand in hand.
If you’re serious about your credit, you’ll learn how to both repair it, and rebuild it.
Join our Credit Building Program to effortlessly rebuild your credit, today.
Or give any of our experts a call,