Rebuilding your credit can be daunting, but it’s certainly not impossible with a little time, focus, and discipline. Before we get started, it’s important to understand that there is no quick fix, and if a company offers a credit “clean up,” it is more than likely a scam because there is nothing someone else can do for your credit that you can’t do yourself (for free!). Here are some ways to get your credit back on track.
On-Time, Every Time
The most significant factor affecting your credit score is payment history. So when you’re in the process of rebuilding, you can’t afford a late payment.
Spontaneous Payment Plan
Paying down your balance during your billing cycle is a quick way to improve your credit score. Because card utilization is another key factor, you want your card carrier to report a lower balance to the credit bureaus. Do this by setting frequent reminders to pay off that outstanding balance.
Keep the Old Ones
Old credit card accounts, that is. It’s tempting to close old accounts, especially once they’re paid off, but keeping those accounts open can establish a long credit history, which makes up 15% of your credit score.
Get Authorized
Did you know you can become an authorized user of a credit card? You get the benefits without having to make charges or accessing the account. The primary user may be able to set a limit for other authorized users, or you can be an authorized user without a card or card number. This won’t impact your credit significantly, but every small move adds up. Just ensure the primary account holder has good credit habits; otherwise, your credit may suffer even more.
Stop Ignoring Collections
Working with collections instead of ignoring them can actually be helpful. If collectors agree to stop reporting your account, you could see a significant change in your credit score.
You Gotta Stop Somewhere
Every time you apply for a credit card, a hard credit check is run, which can lower your credit score by as much as five points. So unless you really need it, don’t apply for more credit!