Lenders see credit score as a major factor in getting approved for a home loan, auto loan, personal loan, and additional credit cards, so it is important to save a solid credit score. It does not have anything to do with income level; someone that makes $30k a year could have the same credit score of someone who makes a $100k a year, so although both may not get approved for the highest line of credit, having a good credit score allows the same financial opportunities. One way to start would be to pull a copy of your current credit report, as you can pull a free copy once a year from the three major credit card bureaus to make sure your credit history is up to date and, with the amount of fraud these days, accurate. Just because you may have made mistakes in the past, eventually with years of hard work with debt payoff and on-time payment, previous poor credit card judgment can be removed with debt payoff and steady on-time payments.
Being responsible with credit is very important to moving in the right credit direction. If you do not have self-discipline to stop using cards, then they should be cut up right away to prevent use. If you find yourself charging more than what you can pay off in a month then you need to stop using immediately, as statement balances carrying over with interest will only continue to set you back. Next, begin a strong push to pay off this debt. Pay off the card with the highest interest rate first. As you stop using the cards and pay down each month, it is important that each payment is made on time, as payments that are thirty days late is reported to credit bureaus, as well as being late could jump the APR to ridiculous levels.
Now that you have a plan of attack and begin a course of action, you might ask when you can start to see positive results. Although it may not seem like it right away, any reduction in debt each month is a positive. Patience is important, as credit scores will increase each month as debt is reduced and payments are made on time. Going from a ‘poor’ to an ‘excellent’ score will not happen right away, but with the right discipline, your credit mistakes will be a financial burden of the past.