Innovative Credit Solutions

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By Valencia Higuera
eHow Contributing Writer

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Having a low credit score or no credit history makes it nearly impossible to qualify for a house loan or a vehicle loan. And if you've experienced a foreclosure or bankruptcy, your credit score probably dropped several points. But there are many ways to improve a damaged credit history. Within a few years, you can boost a low score and obtain the best rate on future loans. The key is familiarizing yourself with various innovative credit solutions and sticking with a particular plan.

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Benefits

Individuals with a high credit score receive the best rates/prices on mortgage loans, auto loans, credit cards and insurance premiums.

Types

If you own a home, consider a home equity loan or refinance. Use the money to pay off your debts, and then repay the loan at a low fixed rate. If you don't own a home, use a debt consolidation agency. They'll negotiate a lower interest rate and lower payments.

Time Frame

By eliminating your debts with a lump-sum payment, you can easily improve your credit score by 100 points in a couple of months. If using a home equity loan, refinance or debt consolidation agency to get rid of debt, it may take 3 to 7 years to eliminate debt. However, your credit score will gradually improve each month.