LUBBOCK, Texas -
Bad credit can haunt you for a long time but it's not impossible to improve that credit score. Your credit score helps sum up your repayment history.
"What our lenders are trying to do is assess risk and price it accordingly," Kraig Kern said.
Kern, lead credit analyst with People's Bank, said lenders can define good or bad credit differently. Overall though anything above 700 is good, while anything below 600 is bad. Items on your credit score that influence that number include personal debt obligations, high credit card balance, late payments, unpaid medical expenses, bankruptcy and foreclosures. That doesn't mean you won't be eligible for financing.
"But you're going to get a higher interest rate on whatever you're looking to finance and the thing about that is that in the long term you're going to end up overpaying for whatever that is you're looking to purchase," Kern explained.
To change that Kern said fix your credit score, first by getting a copy of it.
"Is everything that's listed there things that make sense to you, things that you agreed to pay in the first place?," Kern asked. "If not the next step would be to dispute any items that are questionable that you don't recognize."
Initiate the conversation with those companies you are indebted to and pay them back accordingly.
Next create a better payment routine for yourself.
"Come up with a new plan whether that be a budget. Just put pencil to paper and the things you want to just really concentrate on is, who are you obligated to pay and when are you obligated to pay them," Kern said.
Fixing those negative items on your report will have you moving in the right direction. Kern said as time moves forward those items will have a lesser impact on your score.
"It's good to have a good routine today to create positive momentum for your credit report and in time that will replace the negative items that are listed," Kern said.
