Obviously, the people who have good credit got it somehow. The same goes for the people with bad credit, and those in between. Just about every payment that’s made or missed to credit cards, bank loans, and even distance-learning courses has the potential to make or break your credit. Good credit can very quickly turn bad if you start missing payments from one or several sources… and once your credit score has dropped, it can be difficult to bring it back up again.
That’s not saying, of course, that it’s impossible. Your credit report is very adaptable, and several different items are taken into account when calculating your score. You can check it yourself, either by running a credit check or by contacting one of the credit reporting agencies and requesting a copy of your most recent report… a law passed in 2004 allows you to check it for free once a year. You can also request a free report from one of several online outlets, but beware: in signing up for free access to your report, you’re often enrolled in a credit monitoring service (with a free trial) which can be very difficult to unsubscribe from before they charge you for the monitoring.
If you do have a low credit score, there are several things that you can do to improve it. First of all, work on paying off any outstanding debts that you might have… even if your score was dropped by bad payment habits in the past, once the debt is paid off it won’t continue to drag your score down. Make regular, on time payments on any open lines of credit that you might have, and if you can afford it try to open up a new line of credit with a small credit limit. Though it will take time, having a lot of positive reports coming in on your file now will start to repair the damage done then. Negative marks on your credit report can stay in place for up to seven years… if you’re trying to reestablish your credit by getting positive reports coming in, it still may take several years before a major increase in your score occurs.