Rebuilding Your Credit After a Credit Disaster
Getting on the road to improvement with your credit looks like a battle, but the fact is it took many years to screw up your credit and it is going to take years to get back to a good standing. Here are some methods to help you on your way.
If you are looking to start rebuilding your credit, one of the first things you should do is get a copy of your credit report. You want to review it not only to see where you are, but also check for any potential errors. If there are errors more than likely they are hurting your score and if removed could give you an initial boost.
Moving on, the most important commitment you must make is to never pay your bills late. Your payment history makes up the largest portion of your credit score and paying late will kill your chances for improvement. A monthly budget is a great tool to make sure you have the money to pay your bills and you do it on time. Also, if you not current with any of your accounts you must do anything you can to get current.
The next step is to develop a plan to reduce the amount of debt you have. Your debt to credit ratio is the next largest portion of your credit score and carry high debt will hold you back. From here on out, you must not spend on your credit cards and use your budget to find money to apply to your debt. If you want a jump start, you should have a sale on eBay to sell everything that is not bolted down or even get a second job.
You should also not apply for any new credit. If you are offered a 10% in store discount if you apply for a new credit card; you should say no. First, you must realize you are not good with credit. If you were you would not be in this situation. You must know your weakness to get better.
Like stated above, rebuilding credit is a commitment. You must be ready to start on a plan and stick with it for years. There should never be the thought of reverting back to those old habits that got you here.