 TITLE: Break Out of the Cycle of Bad Credit CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: March 21, 2017_\nThere are a lot of people in American who have bad credit and the cycle of bad credit is a vicious one. If you’re not mindful of what it takes to break it, and dedicated enough to repair your credit, all you can expect is more of the same. It was once thought that having a bad credit score was the result of bad decisions — but it is not that simple. There are many factors that go into your credit score so you can't just point your finger at one thing. The good news is we can help you break the cycle. Fact is — it’s using mostly good old common sense.\nPay Your Bills on Time, _Every Time_\n------------------------------------\nDo not waiver on this point…_ever_. In fact, pay your bills early if you can just to be sure they don’t get missed. Or set up automated payments for accounts that offer this option.\nYou will be tempted to veer off this course now and then. Don’t let it happen, not even a day late. Because once you allow yourself a day, it’s that much easier to allow yourself a week. Then, before you know it, you’re inching dangerously close to the dreaded 30-days-late mark where your credit could take a big hit.\n**Pay Off Credit Card Balance Every Month**\n-------------------------------------------\nNot the minimum payment, not twice the minimum payment, but _the entire balance_. This is not only good for your credit score today, it is also the key to long-term credit success. Paying off your balance prevents you from getting in over your head, which can lead to late payments, collections, and charge-offs.\nThe only exception to this rule is if you have an emergency situation that requires you to charge more than you can afford to pay by the end of the month (though this is where an emergency fund would have come in handy).\nKeep Credit Utilization Ratio Under 30 Percent\n----------------------------------------------\nLet’s say you have $1,000 of available credit on your credit card. The last thing you want to do is max out that card, even if you pay off the entire balance before the end of the month. Why? Because credit scoring models reward you most when you only use 30 percent or less of your available credit at any one time — in this case $300.\nDoes that $700 of unused credit seem too hard to resist? Remind yourself of this. Credit cards should be used as tools to build your credit score, not to buy things you don’t have the money to pay for now.\n**Stop Applying For New Credit Cards**\n--------------------------------------\nApplying for new credit can help your credit, but don't apply for a new credit card after you have maxed out your other ones. This is a sure sign you’re living off your credit cards, a no-win situation that can only end in financial disaster. Don’t think you can make ends meet without a new credit card? It’s time for a drastic overhaul of your income and\/or expenses.\nCancel cable once and for all. Find a side job. Move to a cheaper place if you have to. Do whatever it takes to start spending less than you actually earn. (And make a plan for paying off those maxed out credit cards.)\nDispute Incorrect and Negative Listings on Your Credit Reports\n--------------------------------------------------------------\nWhen is the last time you looked at your credit reports? More to the point, when’s the last time you disputed erroneous\/negative information on your credit reports? These could be the reason your credit score is declinging. \nIf it’s been a while (or never) then don’t waste another second. Request your free credit reports from all three credit bureaus at AnnualCreditReport.com. Then get to work disputing erroneous listings with the credit bureaus.\nBy just following these few simple rules, you will be able to break the cycle of bad credit and increase your credit score. Remember that fixing your credit does not happen overnight, so give yourself some time and just keep thinking about the light at the end of that tunnel. END