While the mismanagement of credit can hurt a consumer's credit score, acquiring credit and paying it off can make significant improvements in a consumer's bad credit history.
Credit scores can be improved through the acquisition and repayment of two kinds credit – revolving credit and installment loans. Revolving credit is typically provided by a credit card, while an auto loan or mortgage is an example of an installment loan.
Those seeking to improve their bad credit history often cancel credit cards and try to stay away from them altogether, but this is not always the best strategy, according to MSN. Having a credit card, spending small amounts on it and repaying the balance at the end of every month can reportedly improve a credit score.
Acquiring an installment loan and making payments on it can also improve a consumer's credit. Drivers seeking to improve their credit can obtain car financing for an affordable vehicle and make regular payments on the loan. Car loans for people with bad credit accommodate those with less-than-stellar credit history who may be turned away by traditional lending institutions.