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Rebuilding Your Credit History

Rebuilding your credit history is extremely important. Consumers that are living on a set budget, have resolved all debt problem and or completed bankruptcy, should then proceed to repair their credit history. The credit rebuilding process is not difficult but it takes time. Your goal is to add positive information to your credit history by obtaining a small amount of new credit from a reputable creditor, paying it off according to the terms of your credit agreement, obtaining additional credit and paying it off on time etc. Laying the Groundwork for Credit Rebuilding: Before you begin the credit rebuilding process, you need to get some preliminaries out of the way. These preliminaries help you ensure that the process goes smoothly. 1. Order a copy of your credit history from the NCR Common credit record errors include the following:

  • Accounts that don't belong to you
  • Incorrect information about your accounts
  • Incomplete information on certain accounts
  • Old negative information that should not be reported
  • Old identifying information that is now incorrect

2. Find out your FICO score: the higher your score the more attractive you are to credit providers. 3. Start saving: A savings account is the foundation of most credit rebuilding. 4. Using a Credit Card to Begin the Rebuilding Process Use your credit card in one of two ways to rebuild your credit:

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  • Use your card to make small purchases each month, and then pay the card balance in full and on time.
  • Use your card to buy something relatively expensive, and pay off the card balance over time. Always try to pay more than the minimum due each month, and avoid using your card for anything else until you've paid off your balances.

5. Getting a Loan Applying for a bank loan and paying it back on time is the next step in the rebuilding process. Set up an appointment with your bank to discuss your borrowing needs. The bank where you have your current and savings account is a good place to start. Be honest and upfront about your financial problems, as they will find out anyway when they look at your credit history. Explain what you have done to improve your situation and avoid money troubles in the future. Let your banker know that you have begun the credit rebuilding process and, as part of the process, you would like a small bank loan.

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