As anyone who has researched credit repair solutions in detail can tell you, not all lines of credit are created equal. This concept may be confusing to some. After all, money owed is money owed, right? Wrong. The type of credit that you use to fund purchases can have a dramatic impact on your credit score.

Revolving credit is the type of credit that is most often abused by consumers, sometimes resulting in dire circumstances such as needing credit repair after bankruptcy. What is revolving credit? The type of debt familiar to a vast number of consumers falls under this label: credit cards. Racking up credit card debt is relatively easy, as a person can continue to make charges until all of their cards are maxed out and they can’t obtain any new ones. Lenders see this type of consumer as irresponsible about their financing, meaning they’re less likely to repay debts.

A credit repair specialist will tell you that installment debt is a better path to take in the event that you need to borrow money. The classic home equity loan is an example of installment debt. The money you are able to borrow is based on the equity of your property, meaning you are borrowing against actual collateral. The lender will require you to make fixed payments until the balance of the loan has been paid off. This type of loan can actually improve your credit score, as it shows lenders that you are a disciplined borrower.

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