How To Rebuild Your Credit

When it comes to certain financial institutions, credit is a wacky game. Credit card companies love it if you have a credit history because then they know whether to hook you in with their cards. Having a credit card can come in handy in an emergency, which is really all they should be used for. On the other hand, too much credit can be a red flag. If your credit history is bad, then those same companies who were once wooing you will throw up brick walls quicker than you can say, “Finance charge.” Having bad credit is the kind of thing that can haunt you. It might stop you from getting an apartment, buying a car and will certainly put a ding in your plans for a new home. Luckily, there are some proven methods for getting your credit score higher.

Step 1: Check Your Report

You can’t really fix something until you know what you’re fixing. There was a time when credit reports cost money to retrieve. Thanks to the Fair Credit Reporting Act, you can now get free credit reports from the big players, Equifax, Experian and TransUnion. The only hitch is it is free once a year. The rest of the time, it will cost a fee. Although there are a lot of websites that profess to provide free credit, many are hoping you sign up for other financial services. It’s best to go through the government website for this one.

Step 2: Set Up Reminders To Pay Your Bills

You can set up reminders on your Smartphones to pay your bills. Paying your bills on time is crucial for beefing up your credit report.

Step 3: Don’t Close Old Accounts

It might seem logical to close out credit cards to increase your credit score. Yeah, don’t do that. A good credit score comes with longevity. If you’ve managed to pay off a credit card, awesome! Just keep the account open and put the card away so you won’t be tempted to use it again.

Step 4: Avoid New Credit

Any time you apply for new credit, you take a ding on your history. That makes no sense whatsoever but it’s the way things go. Until your score improves, lay off the applications.

Step 5: Pay Down The Debt

Obviously, you have to do this and it’s easier said than done. What you have to look for is getting crushed with finance charges. If you’ve been making payments on time, you might be able to get your rate lowered by the credit card company. If it happens that you’ve got a great rate on another card, look into transferring some of your debt. The goal is to get out from under that mountain.

Improving your credit history is a slow process. If you have delinquencies on your report, they could be there for up to seven years. Don’t give up. Pay your bills and before you know it, your score will start inching up. Have you looked at your credit history lately?