How to Rebuild Your Credit After a Period of Financial Ruin

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Once your credit dips to the red zone, the way up looks long and windy, but it’s a mountain you can climb. Click here to learn how to rebuild your credit.

Are you suffering from poor financial decisions of your past? You may have some old debt that you didn’t pay off because you didn’t have the means. Maybe you didn’t know how a bad credit score might affect you which translated to apathy.

As a more mature adult, you’re looking at buying a house, a car, or want to take out a personal loan. Unfortunately, your bad credit history is getting in the way.

We’re going to tell you how to rebuild your credit to reach your financial goals without paying a fortune in interest. Keep reading for more information!

Get a Credit Report

Before you begin attacking a problem, you have to know exactly what it is. This will mean getting a credit report, preferably from all three major credit bureaus. The idea behind this is to gather as much information as possible about your financial history.

You will see all of your old credit lines, negative remarks, discharged accounts, and what your actual score is. You may also happen to see items that aren’t yours. You will have to dispute these items by following each of the bureaus’ guidelines.

Apply for a Line of Credit

This doesn’t mean you should go apply for every credit card you see or that a store offers you! If you’ve been researching how to rebuild your credit, you may already know about secured cards–these often cost hundreds of dollars.

What many companies won’t tell you is that there are bad credit credit cards. Basically, cards that are for people who have poor credit. Whichever card you choose, be sure to make the payments on time every month to avoid further damaging your credit.

Report Your Rent

Monthly rent payments aren’t often reported to credit bureaus but you pay it every month without fail. Luckily, some services will report your rent payment history.

These services aren’t free but will help you increase your credit score. If this isn’t an option for you, consider paying all or part of your rent with your credit card. However, be sure to pay the balance off each month to avoid the cost of high interest.

How to Rebuild Your Credit: Time

The truth is, there is no ‘one size fits all’ on how to rebuild your credit. You may have to ask for a co-signer or to be listed as an authorized user on a friend’s credit card. You may also have to repay old debts or file bankruptcy.

Don’t become discouraged if you don’t notice an immediate improvement. You didn’t create a bad credit score overnight; therefore you should expect the reversal to take some time as well.

There is a chance that you will see some improvement over a few weeks, but don’t repeatedly pull credit reports as doing so can lower your credit.

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