Banks, mortgage brokers, friends and family will not want to lend you money if your credit is bad.
Bad credit can make banks or additional lenders scared to lend money to you because they doubt that you can repay it back.
By establishing a good credit score, you are allowing lenders to know you are very responsible with money and have every intention to repay money.
Even if the loan you apply for is approved there's a far lesser chance of you gaining a decent interest rate, if your credit score is bad.
But, it is not totally out of your control.
Your credit can increase quickly by doing a few certain things.
Begin with making all payments by the due date.
Your credit will have a lot to do with your paying bills on time so be sure to be aware of when all the due dates are.
There could be devastating consequences on your credit if your miss payment deadlines by more than 30 days, and your credit report will maintain this information for 6 years.
Even making your minimum payments on time will show that you are responsible and will have a positive effect on your credit report.
In addition, reduce your debt total if you want to see your credit increased.
The more money you have to use, the more money banks will loan to you; they (the banks) want to see that you aren't the type of person who spends money foolishly.
Lowering your debt by making a few decent sized payments will also raise your credit score.
Make sure you avoid applications for a lot of money in a short time period.
It is best to wait approximately 2 years to sign up for a loan.
But you must be cautious: Applying for too much money too quickly may set off red flags to lender and may cause your credit to take a hit.
Something to keep in mind during this journey is that your credit will not rise drastically over a short period of time.
It will take time to raise your credit score as reporting agencies require that you prove that you are responsible and stable with your money.
Don't give up if you don't see results right away, it can take 6 month to a year to see improvements.
To obtain greater results, make your payments on time and continue to do so, so it develops into a habit.