You might realize something when you’re declined new credit several times, or you have been receiving phone calls from collectors for bills and account balances. This is when you start to grasp the fact that your credit score may not be that good anymore. You then start to look up ways to repair your credit. But you have to start from the problem before you get to the solution.

Why did your credit get so bad? The financial industry sees a FICO score of 579 as bad credit standing. In their eyes, you are a high-risk borrower and wouldn’t hesitate to decline any request for credit that you will apply for. A score of 580-669 is marginally better, at least some of your credit applications will be approved. Still, this score range can be seen as high-risk by some and some lenders will not approve of your loan.

Your credit standing went down due to several reasons. Here are some of them. Remember that the term used is credit standing, not a credit score.

Late payments. A history of late payments include all borrowed funds like credit cards, student loans, auto loans, and mortgages. Since this money is supposed to be paid back, any untimely payments on those balances will increase the likelihood of lenders seeing you as a risky prospect.

Hard inquiries. This means that financial institutions are requesting a report on the state of your credit. A lot of hard inquiries stated on your credit report generally means that you have applied for a lot of new credit. Many major banks will see that as a red flag regarding your financial security.

An increase in credit utilization. This shows that you are using more credit than you have available. It could affect who would be lending you money. You will need to keep a healthy credit utilization rate of less than 30%.

Defaulting on your loans. Defaulting means not paying lenders at all. Seeing this on your report will make future creditors hesitate or refuse to lend you money.

Rebuilding your credit means that any negative items on your credit report will be removed through legal means or covered with positive items. One of the ways that you can rebuild your credit is to open a secured credit card, which requires a deposit equal to the credit limit. You also need to limit your credit card use. You need your credit card utilization rate to be at 30% or below. Reducing credit card use and using a secured credit card will let financial institutions see that you are serious about improving your credit standing.

It may be easier said than done, but you also would need to repay your debts. Nothing tells lenders that you are a low-risk borrower than on-time payments on loans and credit. Instituting limits on your spending and not applying for new unsecured credit cards can also do wonders for your credit.

As will engaging the assistance of Blue Water Credit – credit repair services company in California. We use our experience gained through years in the business in helping our clients rebuild their credit. Dial (916) 315-9190 or visit our website at schedule your consultation with our expert analysts.