Rebuilding After a Credit Disaster
Many people think debt is easy, pay it off and be done with it. Get on with your life. Well debt is not so simple, and the mark it can leave on your credit will hang around for awhile. However, there are ways to rebuild your credit, or to establish credit if you do not have much.
Get a Credit Check up
Just like you need to go to the doctor every year to make sure everything is running smoothly, your credit needs the same attention. Pull your credit report and examine it for errors. By law consumers have to be able to access free copies of their credit report from the three major credit reporting bureaus once a year. Check it carefully, if you find any errors or things that could indicate identity theft, you can file a dispute with the credit agency and they will look into it.
Apply for new credit
The best way to show that you have cleaned up your act is to prove it. Apply for a new credit card and use it sparingly to improve credit. Another option is to find a friend or family member who has good credit and ask if you could become an authorized user on one of their cards. If they agree you can have a card sent to you. You don't even have to use it, you can even cut it up, but as long as they are keeping good credit it will report on your credit as well.
Get Secured
Secured credit cards are also another way to build positive credit. Many big banks offer these now. You open a savings account with money that you can't touch, and they give you a credit card for that monetary limit. If you don't pay, the bank takes the money from that account therefore recouping their losses.
Easy Access
Another thing that consumers can consider doing to rebuild their credit is to get credit from places were it is traditionally easy to get, like credit unions and department store credit cards.
Keep Credit
Once you get a card, keep it open! Even if the balance is paid off or the rate is a little higher, you need that card to establish a report with the credit bureaus.
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