Tips on fixing your credit

Since you know that you need to fix your credit, you know how credit works in general. You should also have a pretty good idea what went wrong with your old credit. Although information about your bad credit can stay on record for a long time (like bankruptcy can stay for up to 10 years) and fixing your credit can take several years, “better late than never” is the best advice here.

Here are a few tips on how to fix your credit score:

• Settle your old debt. If possible, try to settle with companies you owe money to. Either pay off your debt or try to work out payment details. In rare cases companies are willing to forgive you your debt if you showed enough effort.
• Start from the beginning. When trying to fix your credit, it is very likely you will have to start from the beginning. First, try to apply for a credit card even though you know you are likely to be rejected. You may get a credit card with a higher interest rate and minimal limit, but it’s a good start. If rejected, open a secured card (a card that requires an initial deposit which is equal to the spending limit). Try to get a card that reports to the major credit bureaus. Get a clear idea how soon you can upgrade to a regular credit card.
• Get a loan. Showing consistency in repaying your debt always looks good on your credit report. When making a significant purchase try to get a loan even if you can afford to make the entire payment at once. Paying off your loan shows the creditors that you have the necessary discipline and proper money management.
• Stick to the discipline. Once you start rebuilding your credit, remain disciplined. Don’t miss payments, don’t go over your credit limits, don’t open too many credit cards etc. Consistency is one of the criteria the credit bureaus are looking for when evaluating your credit risk.