Having a bad credit history can cause numerous problems for you - especially when you need to apply for a loan or credit down the road. Your payment history is a good indicator to lenders as to whether you are a good or bad credit risk. If you have a less than perfect credit history, then you'd do well to rebuild your credit now instead of later.
Your bad credit may have be the result of any number of situations. Sometimes its due to poor budgeting habits, while sometimes it may be due to problems outside your control, such as a medical emergency. In either case, lenders only care about your score and rarely want to know the story behind it. Don't leave your financial future in the hands of some bankers. Follow these steps if you want to learn how to rebuild credit quickly.
Rebuild Credit Tip # 1: Monitor Credit Rating To Identify Erroneous Data
You should take advantage of a free monitoring service you can find offered all over the internet. Monitoring your credit report will help you gain an insight about your current financial status. While you check your status you're also more likely to catch any remarks or accounts reporting inaccurately- well before you need to apply for credit. Removing errors takes time, so get a head start.
Rebuild Credit Tip # 2: Remove inaccurate items from your credit report.
If you inspect your report closely, you are likely to find errors. You can contact the credit bureaus to challenge inaccuracies and have them removed. Never send your disputes through email. Sending certified mail is much more effective as it leaves a paper trial. Allow 45 days for the credit bureaus to respond. Many people give up after one try. Don't make that mistake. Make sure to follow up if they don't cooperate at first. In my experience we can still remove inaccurate, unverifiable or obsolete items after 6 rounds of disputes.
Rebuild Credit Tip # 3: Obtain new accounts.
After you've removed the negative remarks, you will need to begin establishing new tradelines. There are cards available for people with less than perfect scores. They're designed to offer you the opportunity to rebuild your credit after a financial hardship. They come in both secured and unsecured versions. Shop around for the lowest rate and fees.
Rebuild Credit Tip # 4: Use Credit Cards Wisely
Use your credit cards once every other month or so to keep them active. After a few months of inactivity a lender may close your account. Keep your balances under 10% of the credit extended to you for maximum credit score boosting effect.
Rebuild Credit Tip # 5: Avoid Penalty Charges By Keeping Up With Monthly Bills
Another way to maintain and improve good credit is to keep up with the monthly repayments such as revolving card bills, mortgage bills and the like to avoid paying penalty charges. High penalty charges are usually imposed by creditors for late payments. Keep your account up to date.
Rebuild Credit Tip # 6: Be Responsible In Managing Your Credit Limit
Do not go over your credit limit. More often than not, going over the authorized credit limit will have high penalty charges and will ding your credit score. No matter how small or large the amount you have exceeded, the penalty would be the same. Always manage your spending and keep your balances under 10% of your limit.
Rebuild Credit Tip # 7: Borrow Sensibly
Ironically, borrowing more could help you build credit. That means you have to borrow sensibly and must be cautious to not sink deeper into debt for the sake of building credit. Avoid excessive borrowing.
Rebuild Credit Tip # 8: Plan Your Expenses
Create a realistic spending plan. Make it a point not to spend more than what you can repay. If it is unnecessary, do not borrow money. Also, pay more than the minimum amount due in your credit cards. A good rule of thumb is don't buy anything if you can't pay off the entire credit card balance in full at the end of each month.
How To Build Good CreditBrian Diez is the CEO of http://www.ScoreMoreCredit.com and a nationally recognized credit expert. To learn how to re build credit fast visit www.build-credit.net and learn about a credit repair card with no application fee, low interest rates, and a $5,000 limit.
No comments:
Post a Comment