Credit Repair Tips:

Your Credit Score is a complex mathematical calculation that comes from the information available on your credit reports which are maintained by the three major Credit Reporting Agencies (CRAs). Information on your credit reports is placed there by lenders or other businesses that you have a regular financial obligation to such as landlords or even your utility companies. Your credit score can be damaged or reflect negatively in one of four primary ways:

1. Late Payments: Making payments late on your rent, your credit cards, your utility bills, or any other loans you have such as student or car loans can all cause indications to appear in your credit report which are viewed negatively by potential lenders.
2. Defaults & Collections: If you find yourself unable to pay for a loan or if you are unwilling to pay a loan for whatever reason, a jilted lender can report this to one of the three credit reporting agencies and it can stay on your report for many years.
3. High Credit to Credit Limit: Once you have a revolving credit account of any type such as a credit card, your credit limit is a part of the evaluation of your credit score. Lenders view this aspect of your credit negatively if your credit usage exceeds 25% of your total available credit.
4. Bankruptcy: Filing for bankruptcy is done when you cannot pay your financial obligations at all. It eliminates your need to pay back most debts such as car loans or credit cards or even your mortgage. The downside to a bankruptcy filing is the extremely negative impact that it will have on your credit report and score. This serious, negative hit will stay on your credit for seven years or more.

Using Your Rebate to Improve Credit

You can apply your credit rebates to help with two out of the four items above that can cause significant damage to your credit report. Once you receive your money from your taxes you can use it to pay down (or better yet, completely pay off) your credit card balances, which can have a significant impact on your credit score. Another way you're your refund can help with your credit is by using it to pay back any past due debts or debts that have gone into collections. If you have accounts that are in collections, you should consider having the debt professionally negotiated to lower their balances if possible, which would make paying them off easier. With this approach, a tax refund that would otherwise only be large enough to pay off one debt might be stretched to pay off two or three.