Debt is the number one contributing factor to both growing and destroying your credit. The tipping point is sensitive and one can quickly go from improving their credit score to sitting at the bottom of the damaged ladder. Knowing what damages your credit and how to repair it are important lessons for anyone.

The Credit Game

Debt is the big player in credit. If you have never had any, never had a positive payment history or have too much debt, you are looking at a bad credit score. The number one culprit to a bad credit score is delinquent accounts and missed payments. That means that to repair your credit you need to erase the negative history of your debt accounts. While you may think that filing for Florida bankruptcy damages your credit, the opposite is true.  Having your debts eliminated gives you a fresh start at a new credit history. So what’s next?

1. Get a copy of your credit report — look for inaccurate information and have it disputed.

2.  Outline and follow a budget — living within your means and paying cash is your best strategy.

3. Start a savings — always have an emergency fund for the unexpected.

4. Plan your credit purchases — don’t use credit as a tool of financial convenience, it should be used for specific purchases that you have planned to pay off within a few months.

5. Keep your balance low — never carry a balance that is more than 40% of the total spending limit on the card.