Your credit score is very important. It is a determining factor in whether you will get preapproved for a car loan or even a cell phone line. However, if you have a bad credit score, it is not the end of the world. With time and hard work, you will be able to improve your credit score.

What Is a Credit Score?

A credit score is a person’s credit history. It tells lenders the risk factor of lending to that person.

FICO is the most commonly used credit rating system in the United States. Depending on the type of credit you are applying for, a different system may be used.

For example, if you are obtaining a home mortgage loan, the lender will use the Freddie Mac and Fannie Mae systems. For those systems, anything below a 620 is bad, and anything above a 640 is good. But if you are applying for a loan under the Federal Housing Administration, which helps people with poor credit, a FICO score of 580 may be satisfactory.

All credit systems use the same basic concepts: the more regularly you pay your bills on time, the better your credit score will be.

How Do I Prevent Bad Credit and/ or Improve My Credit Score?

To prevent a poor credit score, you should attempt to pay your debts on time. In general, paying your debts no longer than 30 days late is ideal. Also, you may improve bad credit by slowly paying off your debts and asking your credit provider to reduce your line of credit. You should always avoid opening and closing lines of credit too frequently.

Do I Need a Lawyer?

If you believe there has been fraudulent activity on your credit report, you may need to contact a lawyer to help you get rid of the bad credit history. Also, the lawyer may help you develop a plan to further improve your credit score.