Two Types of Credit: Installment and Revolving

Credit score repair really must include using credit lightly to establish a solid credit history to boost your credit score. There are two types of credit and for bad credit repair, it’s important to understand their differences. Installment credit includes lines of credit that have rates and fees that are charged up front and a set amount is to be paid back within a term of time. Examples of Installment credit are student, car or home loans. Revolving lines of credit allow an authorized amount, also known as a credit limit, to be charged each month or billing cycle. Fees and rates are then charged depending on the debt that is accrued. Examples of Revolving credit include credit cards and home equity lines of credit. When you are developing your strategy to repair credit, you will want to utilize both types of credit because ultimately your goal is to prove to lenders that you are “credit-worthy,” or able to handle credit.