Rebuilding credit is not a walk in the park. You will have a hard task ahead of you of proving to credit card issuers and financial lenders that regardless of the past poor credit history you had, you are determined to make your payments in a timely manner as per the terms of the agreement.
It can take some time to rebuild credit but with the right information and good planning, it is possible to accomplish. To Guide you on how to do this, here are 5 tips to rebuilding your credit.
1. Employ The Authorized User Strategy
You can approach someone you trust and request them to include you as an authorized user. Being an authorized user means that you get someone else’s credit card written in your name and you can use it for your daily transactions even though you are not the card’s primary owner.
There are cards which allow the primary cardholder to set a spending limit on the authorized user and this is good to the primary cardholder because they’ll feel much more comfortable adding you as an authorized user. Ensure that you choose someone who handles his credit well as an authorizer for you.
2. Get A Secured Credit Card
One most effective method to rebuild your credit is to get a secured credit card. This card will come in handy if your bad credit history disqualifies you from being able to access a regular credit card.
A secured credit card’s requirements are that you bank your money in a linked savings account and this will act as collateral. Since the money is in that account, you can easily get approved for a secured card.
The payments you make will be reported on a monthly basis to the credit bureau and this will go a long way in proving that you make payments on time regularly which in turn rebuilds your credit score.
3. Make Timely Payments
Ensure that you pay your bills on time on a consistent basis. Nothing hurts your credit score like a bad payment history. If you keep forgetting or have a disorganized schedule that makes you miss payments, you can set up automated payments. Your payments should be timely to rebuild your credit.
4. Apply For A Credit Builder Loan
Credit builder loans are loans made by credit unions and some banks and are designed to help people improve their credit profile. For you to access this loan, you’ll need to become a member or a customer of the credit union or bank and you’ll need to reveal your steady income source and your loan repayment ability.
The one-time payments you make are reported to the credit bureaus and the money that you borrow is released to you the moment you finish repaying the loan.
5. Keep Your Credit Cards Open
The longer the credit history you have, the better it is for you. If you close down your credit accounts, there will be less credit available to you. If the account is closed, the credit history you had on that account isn’t added up to the credit score average. So keep your cards open and use them well.
Rebuilding your credit will take a bit of time. Resources like a car, for example, need a lot of cash to acquire and if you don’t have the cash up-front, an auto loan from sites like Crediful.com can come in handy.