We now see the importance of having good credit and how it can affect our lives. When you’re looking for an apartment or purchasing a home you are judged by your credit. To obtain new credit they look at your previous credit history. Having NO credit is just as bad as having bad credit according to creditors. Now, since the economic crisis jobs will not hire you if you don’t have good credit. So with this in mind, you should take the necessary steps to rebuild your credit if your credit score has diminished or create new credit.
- Pay all your bills on time. This is extremely important as creditors note your account for being late and hold it against you. Some jobs will check your credit report so you want them to see that you are responsible.
- Obtain a gas card or a secured credit card which is secured by you from your bank, meaning the money is backed by your own funds. A secured credit card of $500 should be paid just as you pay your other credit cards, ON TIME! You don’t want to max out a $500 card in the first month. You will make very few charges on the account and pay the balance in FULL like an American Express card so that you have available credit to you in case of an emergency and will improve your credit.
- Keep a minimum amount of credit cards. You don’t want to apply for too many cards as it can hurt you in the long run and damage your credit even further.
- Piggyback on someone else’s card. This means you can have a card in your name that belongs to someone else and they have you down as an authorized user. Believe it or not this will actually help you to build your own credit. You must have permission from the card holder and you must be disciplined so that you do not damage the other person’s credit by overspending on their card. There should be a mutual level of trust to consider the piggybacking option.
- Request for a FREE credit report! You are entitled to a free credit report once a year and whenever you are denied credit. You should review your report and check for errors which may have caused you to be denied credit. Send any errors you notice to any of the following credit bureaus Experian, Equifax, or Transunion in WRITING. They have 30 days in which they must respond to you. Once they address the error and remove it from your credit report it can raise your credit score depending on what the issue is.
- Avoid pre-paid cards as they do not report to credit bureaus and will not help you to establish or rebuild your credit.
The key to rebuilding your credit is to pay on time even if you just have the pay the minimum for a time period and don’t overextend yourself with too many cards. You can find yourself in more debt. Know what you can handle. By having a decent credit score it can help you to obtain certain goals like buying a home, starting a business or retaining a job. Remember, you should have no more than three credit cards, if that much to rebuild your credit. For more information on rebuilding your credit visit;