Five Simple Ways to Re-Establish Your Credit
When I was a stock broker I always had people ask me for fast and easy tips to get their credit re-established. What I would always explain is that while there are many ways in which you can re-establish your credit, there are no shortcuts. The process is one that takes time, but it can be done. Here are five simple ways to make sure your credit score will climb instead of drop:
1. Pay on Time: This is a no brainer, but really it is also a quick and easy tip to re-establish credit. Paying all of your credit cards and other debts on time will keep your credit score from dropping any further and over time will help to bring it up as well.
2. Don't Close Accounts: Unless you are being charged a fee to have credit card accounts open, don't close them after you have paid them off. This will actually hurt your credit score, not help it. The credit bureaus will look at a zero balance on a credit card much more favorably then an account that has been closed as an open account shows that credit is established and a closed account shows nothing.
3. Get a Savings Account: Getting a savings account shows some financial stability on your part and can be used as collateral on certain types of loans.
4. Pay Down Balances Evenly: While you do eventually want to pay down all of your balances to nothing, you should spread the money that you will use evenly over all of your debts. One low balance on debt and four high balances on other debts are not as favorable to creditors as seeing five balances that are right in the middle of what is owed and what the limit is.
5. Don't Apply for too Many Accounts: Every time you apply for a credit card or a loan of some type, your credit is run. Applying for too many accounts over a short period of time can be disastrous to your credit. Instead of trying to establish new credit, work on what you already have and then go for new accounts when your credit score is higher.
Remember, that it took you some time to get into the financial mess that you may be in and so it makes sense that it will take you some time for you to get out. By applying these five simple tips to help you re-establish your credit, you can get your credit back on track and have your credit score begin to climb before you know it.
Source: Bad Credit Advisor, Reestablish Credit, Badcreditadvisor.com
Published by Jimmy Collins - Featured Contributor in Business & Finance
Full time freelance writer. I am a former stock broker and money manager who still loves all aspects of finance as well as sports and fitness. Currently I hold a 4th degree black belt in the Martial Art of T... View profile
How to Re-Establish Your Credit Using Secure Credit CardsMost often is it credit cards that cause credit problems, but a certain kind of credit card can help you begin to fix those problems.- How to Re-establish Credit with a Secured Credit CardIf your credit is ever ruined secured credit cards are one way to re-establish your credit. You may have to pay a high interest rate and an annual fee.
- How to Raise Your Credit ScoreThe credit score is a number that summarizes your credit risk based on a snapshot of your credit report at a particular point of time. The credit score is used to evaluate your creditworthiness, or ability to repay a...
- The Risks of Buying a Car that Could Affect Your CreditPeople buy cars every day. However, buying a car may have a negative effect on a person's credit if mistakes are made or if the person is in an accident. Here's what you need to know.
- How Does a Foreclosure Affect Your Credit Report?Foreclosures can lower your credit score and remain on your file for seven years making it difficult to obtain credit in the future.
- 10 Easy Ways to Raise Your Credit Score
- The Best Credit Cards to Get When You Want to Establish or Rebuild Credit
- Advantages: Automatically Pay Bills/ Donations with a Credit Card
- Top Five Credit Card Websites
- Credit Card Blocking
- Temporary Credit Cards for Online Shopping
- Small Business Credit Cards: An Overview
17 Comments
Post a CommentBeing a newly divorced woman in my mid sixty's, and living on a low income scale, I take my highest bill and pay extra on it every month. My one credit card is limited to 1,200, and I pay at least 100.00 a month, saving alot of interest. My credit is good and I save every extra penny and at the end of the month, whatever I have not spent goes into sort of a savings so I always have a emergency fund. I raise a small garden, shop at the Goodwill, garage sales and thrift stores. And I find alot of fun shopping 2nd hand--I use coupons whenever I can and buy the limit as long as it has a shelf life. I have only basic cable and that saved me over 100.00 a month.
I found this information regarding paying down debt and doing only what is absolutely what is a necessity. I now live on a fixed income and every penny counts. This article gave me so many ideas about what I could do to build an emergency fund and get out of debt quicker. I have not had a credit card for over 20 years due to a divorce. I was left with all the debt because I was foolish and allowed my ex to talk me in to opening everything in my name, so I have been fighting this credit problem for many years. i would love to bring up my credit score and live the rest of my life in peace. I am so glad I found this article. Thank you!!
If you can't afford it -- don't buy it. I have zero credit card debt because I don't use credit cards. Life is simple, our tastes are simple, and we live fine on a 40,000 a year teacher job. We rent our house -- and refuse to buy a house, which adds even more expense -- taxes, insurance, etc. I think more and more people are discovering living a simpler life. We don't eat out -- we make our food at home and entertain ourselves at home so we don't use gas in excess. Shopping trips into town 20 miles away are once a month. I wouldn't trade this life for the urban rat crawl ever again in my life. Simplify. Shop locally. Bank locally. Try to keep it green.
Oh, no! More Pat Boone type advice! " be good and hard-workin' so you can get more credit to buy crap you really can't afford and may not really want and go broke again then be good and work even harder and do this and that so you can repair your credit so you can buy more crap....." ad naseum.
Paradigm shift, anyone??
Do you find it IRONIC the ways to keep good credit are the same methods that keep you in debt. Good credit means you have carried a sizeable portion of debt and paid you bills on time. CASH IS KING people. You should only care about credit if your going to buy a house.
Paying down your cards evenly may look good on your credit report, but it is an inefficient way to pay them off. Debt snowball method is better and will get you COMPLETELY out of debt far faster.
Paying a little on each one is exactly what the banks want you to do, they end up with much more of your money.
I think some of this info is useful -however , keeping an account open with a zero balance is sometimes out of our hands. I had a credit card with a zero balance (jc penney) and the company mailed me a letter saying they were closing my account (after 17yrs) due to inactivity...(i had not used the card in 19 months). I called/argued with cust svc--they said if i wanted a card to reapply...I did not. Still have not. I treasured that card because it was the first credit card I ever had. Still sad in Ohio.
very practical and thanks for sharing
so how do you get a better score if all you have is bad credit but have no open accounts to be able to pay on on time I have nothing on my credit that is less then 3 years old but haven't been able to open anything eather to try and build better credit?
I have the same situation three ceredit cards 10.000 $ and loans on top of it which friends gave me. I was not able to pay it off in 1.5 yrs, now I moved to a different house, have a room mate,.. save $500.00 on rent and here starts what the author said: dicilpline .. pay these 500.00 towards the cards. I am at square one ,.. it is a challenge, not a problem, but there is light at the end of the tunnel