First and foremost free credit repair is just that, free, meaning that if you are in deep credit card debt you will incur no greater fees to get yourself out. Contrarily if you are unfamiliar with the process of contacting creditors to set up payment plans, or if you are unaware of how to remove mistakes from your credit report the plan could very easy backfire.

On the other hand if and when you decide to hire a credit repair company you are paying an additional fee, generally around $500 per year to have them do the work for you. This means less stress, and as long as you are able to hire a reputable company you can rest easy knowing they are going to take care of it properly.

At the end of the day, the easiest way to stay out of this type of credit card mess is to only have one, maybe two pieces of plastic and be sure to pay off each card in full every month. If you do not feel like this is an option, then you may be better off not owning a credit card in the first place.

The majority of consumers are not aware of their credit score or even the way that the score is calculated and what components are used to measure credit worthiness. The truth is that knowing this information could save you from making terrible mistakes that could cause your score to plummet. Learning how the score is calculated is simple, as there are five basic aspects that are determined to come up with the overall number, referred to as the credit score.

The range of credit scores range from 300 to 850 or worst to best. Determining where you lie on this score can help you assess the health of your personal financial situation and your score will also demonstrate your credit worthiness to potential creditors.

Here are the basic compilations that are used to calculate your credit score:

35% of the score is based upon your payment history. This means, have you paid your bills on time each month without missing a payment? Being late on a bill payment or missing a payment could cause your score to decrease significantly if this behavior is repeated over time. Even as little as thirty days late for a payment can negatively affect the credit score.

30% of the credit score is calculated using the amounts that are currently owed towards credit cards, loans and other types of debt. It is recommended that the debts be under 30% of the credit limit or available balance in order to make the most of this portion of the credit score. The total amount of credit available will not affect your credit score in most cases; it will simply affect your score if you are reaching your limits at each one of these accounts.

15% of the credit score is based on how long you have been using credit. The longer that you have been using credit, the higher this portion of the credit score will be. It can be difficult to maintain a credit rating if you have just begun using credit  therefore, it is important to realize that a stellar credit score will not happen overnight.

10% of the credit score is calculated by determining how much new credit that you have been applying for. There is some truth to the statement that applying for too much credit in too short a period of time can negatively affect the credit score, this should be determined the next time that you think about applying for another credit card on a whim.

How much credit do you have and what variation of credit is it? The last ten percent of the credit score is determined using the different types of credit that you have begun to accumulate. Those that have accumulated credit from a variety of resources can have a higher score than those have used one sole source of credit.

There you have it; Now that you know how the credit score is calculated you can begin to take into account your consumer behavior when it comes to paying your bills and accumulating debt and begin to think about the effect that these behaviors may have on the credit rating.