Even if you have struggled with credit in the past, it doesn’t mean that you are doomed to spend the rest of your life paying high interest rates and struggling to qualify for loans and credit cards. If you take some time to do your homework and arm yourself with the right tools, then there are plenty of ways to help rebuild credit on your own. For example, there are many simple things you can do yourself to help improve your score on your own without hiring a credit repair service. Here are just five of them.
Pay All Your Bills On Time
One of the best ways to start rebuilding credit is by paying your bills on time. One late payment or missed payment can negatively impact your credit score by a significant amount. So, set up automatic payments and make sure all your bills are paid on time. If you have any overdue payments, contact your creditors and work out a payment plan that will get them current. You should also check your credit report for errors and dispute any incorrect information with the reporting agency. Lastly, take advantage of resources like credit pro solution which offer debt advice services that will put you on track for building good credit again.
Get A Secured Credit Card
One of the best ways to start rebuilding credit is by getting a secured credit card. Secured cards are backed by your own money. You will need a bank account, so be sure that you have enough funds available for this type of card. With secured credit cards, if the balance is not paid off at the end of each month, then interest will accrue on your account. Credit repair services and debt management programs may also help with improving credit scores and getting financial assistance with managing debt payments.
Review Your Credit Report
The first thing you need to do is review your credit report. This will show everything lenders know about how you manage your money, how many times you have been denied a loan and other important information. You should also take this opportunity to dispute any inaccuracies or errors that may exist in the report. It’s best to get this done as soon as possible so it doesn’t take up too much of your time later. If you’re not sure where to find your credit report or don’t have an account, there are several services available online that offer access.
If there is something you’re unsure about on your credit report, then be sure to consult a professional such as those at credit pro solution who will walk you through the process of fixing mistakes and getting back into good standing with creditors.
Catch Up On Past-Due Bills
You must take care of any past-due bills that may be on your record. The quickest way is to pay them off as soon as possible. If this is not an option, make sure that you make a payment arrangement for the remaining balance with the company. In addition, try paying bills ahead of schedule so that you have a few months of good payments before your next review date. You can also create a system where you pay check into a savings account every payday and use it to catch up on overdue bills when they come due.
Check Your Credit Score Regularly
Apply for a secured card. Secured cards are great because they require a security deposit that is usually equal to or greater than the limit on the card. You’ll want to make sure that all payments made go on time so as not to incur additional fees.
Do not close unused accounts – it looks better on your report if the account remains active, but has no balance due and open monthly statements. If you have an account with an outstanding balance, try paying off the entire amount before closing the account. Try to increase available credit by getting another unsecured card with a low limit on it and making small purchases until your score increases.
Maintain good personal habits such as staying on budget and saving money. These habits will be reflected in your score eventually when lenders look at them during background checks. Paying bills online will also help build your score since most of those transactions are captured electronically within many days of purchase.
Use Different Cards For Different Needs
One way to help rebuild your credit is by using different cards for different needs. When you use a card for a specific need, it helps build a history of responsible spending which will eventually lead to better scores. For example, if you want more cash back rewards, then use one card for gas and another card for groceries. If your goal is to save money on interest rates, then use one card for the lowest interest rate possible and another card for cash advances. What this does is allows your balances on each account to be paid off separately and allows you to pay them off faster while also earning rewards and avoiding high interest rates.
