A good rating on your financial background is a must when you have to apply for a loan or take out mortgage. That is the first thing a prospective lender will look for when he receives your application. If the information available is not satisfactory, you need to take immediate steps to do some credit repair.

What you don't know might not be able to hurt you' is not a correct statement when applied to your credit score. It is based on a sheet prepared by agencies whose sole work is to keep a track of your finances and update information as and when there is a change. It contains all financial data like your payment history, loan balances and credit card debts. If you have ever applied for bankruptcy or faced foreclosure and other such things it will be easily available to view, hence the need for credit repair. This is a free credit report which is available to lending institutions when you apply for a new loan or credit card.

Damages To Your Rating

When you are late in making your payments it will eventually show up on your report. It can do some damage to your score when you have a number of late payment remarks especially if the amounts and the period of missed payments are big.

It might damage your rating when you find yourself needing to settle your accounts with your lender. You will need to do some serious credit repair if you want to come out of this situation looking better off.
When you over-utilize your cards and reach uncomfortably close to your credit limits, it means that the agency has more reasons to award lower points in your favor. When you apply for new cards again and again you are giving an opportunity to new lenders to keep accessing your information, to check whether you can handle them.

Repair The Damages

Your rating is a very closely kept secret but it is in your best interest to do some credit repair when you find the numbers lacking. The first thing when you need to do some damage control is to get a hold of a copy of your report from the agencies that have one on you. You need to make sure that the information available on them is accurate. If not, have physical proof of the mistake that has been made.

Then start credit repair by making sure that you pay all your bills on time. It is the first thing that lenders look for, when they need to get an idea of your creditworthiness. You will also need to make sure that you are not trying to max out the credit limit. Maintain a safe distance from it, on all the cards you are holding.

Open only that number of cards or debts which you can handle. Having too many cards and not enough means to pay them may require you to undertake credit repair.

Conclusion

It is not always necessary that you need to have a credit score. If you have never borrowed from a bank or issued a credit card for yourself then you are in no danger of having a bad credit rating. Your clean history will be a good ground for starting on the right note.