A person’s credit score can have a big impact on several of the major decisions that come about in one’s lifetime. When attempting to purchase a car or a home, for example, a person’s credit score goes a long way in determining what is possible. Future employers are now examining the credit histories of potential employees looking for signs of risk. It is wise, then, for those whose credit background is sketchy to engage in some form of credit repair.

In order to repair credit, it is necessary to understand where a credit score comes from and how it is determined. There are three credit bureaus – Equifax, Experian, and TransUnion – to which most lenders report. These companies keep records of individuals’ credit histories and use those histories to come up with a credit score. Paying debts on time is a large part of the equation in determining a credit score. Lenders use these scores to assess the risk of a borrower.

If you happen to have a poor credit score, fear not for there are some steps that you can take to improve your rating. It will take time and some discipline on your part, but the end result will be well worth it. The first step is to develop a plan and set your goals. Assess which debts will need to be paid first and work out a budget that will do so.

When examining someone’s credit history, the most recent history is more important than that of a few years ago. A recent history of positive, timely payments is weighted heavier than a missed credit card payment three years ago. With your new plan in place, your recent payment history will help your credit rating improve substantially.

If you have several open credit cards with balances, one option is to consolidate all of that debt into one new payment. A debt consolidation loan will offer you a new lower payment making it easier to meet your financial obligations each month.

Another option is to take out a secured loan, such as a car title loan, and pay off as much debt as possible. Car title loans from Embassy Loans, for example, are easy to obtain, do not require good credit, and are fast. A borrower must have a vehicle with a clear title and he or she can have much needed cash within an hour. The title loan can be used to pay off debt right away and the payoff of the title loan will also result in a boost to a person’s credit score.