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John E. Pytte Sept. 15, 2017

You may feel down if you are going through credit trouble at the moment, but you're not alone. The truth is that many people are struggling the same way that you are. Imperfect credit doesn't make you a bad person, it just makes you as fallible as everyone else! However, you're going to have to raise your score and rebuild your credit if you intend to request something like a mortgage, apartment rental, car loan, personal loan or something else. The following information can help you to understand how to rebuild credit after the ramifications of certain actions, and it can explain how to rebuild credit so that you can start your journey of credit repair today.

What is a Low Credit Score?

A credit score is a numerical figure that lending institutions use to judge whether you, as a consumer, have acted responsibly with credit that someone has given you in the past. A low credit score is a score that falls into the subprime category according to the FICO scoring system. The FICO system goes from 300-850 points with 850 points being an "excellent" credit score. A low credit score is anything that is below the 600-620 range.

How Do You Get a Low Credit Score?

The credit score is comprised of many factors including your payment history, balance usage, type of credit, credit inquiries and more. The quickest way that people find themselves in the bad credit category is by missing a payment. One late payment can harm your credit score immensely. Another thing that can make your credit low is if you use too much of your available balance. Staying under 20 percent of your available credit is the best place to be. Third, too many credit inquiries can cause your score to drop. Every inquiry that you make to a potential provider should be absolutely necessary. You have the potential to lose one or several points every time you apply for credit, so you must be careful with that action and make it count.

How Does a Low Credit Score Impact Your Life?

A low credit score can impact your life in a negative way for many years. First, it can prevent you from obtaining things that you will need in life like a home or a car. It could even impact your employment potential. For example, you may not be able to get a job in banking if you have a poor credit score. It may not be fair for those organizations to judge you, but sometimes they do anyway. You have to try to prevent getting into that position in the first place, and if you're already there, you may have to fight to get out.

Options for Rebuilding Your Credit

There are several processes that you can use to raise your credit score and clean up your profile. Some of the most common ways to fix it are as follows:

  • Debt consolidation

  • Credit counseling

  • Debt Settlement

  • Bankruptcy

  • Personal dispute

  • Credit lawyers

A personal dispute is a process by which you request your annual credit report, go through it, and dispute items that you feel are not yours. This action can have some positive results, but it can also be for naught. Some creditors may refuse to remove or fix their records. Bankruptcy may work, but it will render you unable to obtain credit for as long as 10 years. Settlements may work, but the credit report may still display the account in a negative light. Speaking with an attorney who does credit counseling and helps to restore bad credit is most likely your best option.

Now you have a little bit of insight about how to rebuild credit and what you will need to do to start your journey of repair. Repair is possible, but the road to recovery may be lengthy for you. All you can do is take it one day at a time if you want to see some positive results. Things will get better for you one day.

Georgia Debt Relief has been helping Georgia low country residents for a long time with their financial difficulties. Call us today if you need to find out more!