How To Rebuild Your Bad Credit Score

A lot of people have bad credit these days. Sometimes it is simply a matter of not taking their credit privileges seriously. Maybe your credit card issuer has provided you with the utmost in poor customer service, so you feel no obligation to pay your credit card bill on time, thinking "I'll show them who is boss". Do not deceive yourself this way, because they will absolutely have the last laugh as they report your LATE payments to the credit bureaus, and this hurts you by giving you a lower credit score than you should or could have.

Maybe you had fallen on some hard times several months or several years ago, when you got laid off your job, you were going through a divorce, you had some unexpectedly high medical expenses, or a myriad of other possibilities. Whatever it was, it caused you to get behind in your payments, so you were reported to the credit bureaus as having late payments, which again lowers your credit score.

The value of having a good credit score these days can not be underestimated. When you go to apply for a new job, chances are high that your credit will be checked, which most employers feel is a good indication of your character and how seriously you take your duties and obligations. A poor credit score is also going to cause you to pay a higher interest rate on your mortgage, your car loan payments, and many other things, which can add up to costing you hundreds and even thousands of dollars more in interest than you would have paid with a good credit score.

So let's assume that those previous problems are behind you, you understand the value of making payments on time, and that you now want to rebuild your credit so that your credit score will also be increased. Keep in mind that this is a PROCESS and it does not happen overnight. In reality, it will take a minimum of several months of consistently good actions on your part, but that is also part of how your credit score is derived, by looking at your credit HISTORY and seeing a consistently good record. And of course, it takes time to create that history.

Another very important step that many people forget or do not take time to do is to get a copy of your credit report from each of the three major credit reporting agencies, which are Equifax, Experian, and TransUnion. Each of them keeps a credit report on you, and since they do not share data between them, each very likely has a different view of you from a credit perspective. Get your credit reports and go over them with a fine tooth comb looking for inaccurate information. The reality is that the majority of consumer credit reports contain errors, and those errors do not get corrected automatically. In fact, they NEVER get corrected unless you initiate the action to get it corrected.

Another reason for going over your credit reports is to look for accounts that do not belong to you. The crime of identity theft is the fastest growing crime of this century, and you could be a victim of identity theft and not even know about it, although this would probably be reflected in your credit reports by listing accounts that you do not know about.

To improve your credit score, there are multiple ways to do it. With the credit cards you already have, make sure that you make your payments on time. If you mail your payments in, make sure to mail them enough ahead of time so that the payment will be posted to your account prior to the due date. More than anything else, making payments on time, consistently, will be your best friend in your goal of raising your credit score.

Get a secured credit card. Typically you can be approved for one or more of these, since your credit limit is exactly the same as the amount of money you have put on deposit with the card issuer. Use the card sparingly, but always pay it off at the end of the month.

As your credit starts to improve, you may qualify for an unsecured credit card. Again, use it sparingly and pay it off at the end of each month. Always make sure to pay on time.

You did not get bad credit overnight, and your credit score will not improve overnight. But with consistent action on your part and making each and every one of your payments on time, your credit score will improve and give you the type of credit score that you can be proud of.

Source by Jon Arnold

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