With the way credit is handed out and tossed around these days, you can be forgiven if you’ve gotten yourself into trouble. Yes…even that much trouble!
Of course, forgiveness doesn’t mean you shouldn’t start working on rebuilding your credit and getting back on even ground as soon as possible. Many people who have credit issues swear off ever getting credit again, but that usually isn’t very realistic.
Here are some tips on how to rebuild your credit.
How You Got In Trouble
You probably don’t need anyone telling you how you got into credit trouble, but it’s still helpful to learn all the different ways that your credit rating might get damaged.
Here are some common ways:
- Not paying at least the minimum on your debts
- Stopping payments altogether
- Missing one or more payments
- Going over your credit limits
- Having a debt referred to collections
- Filing for bankruptcy
- Making a consumer proposal
How to Fix It
The first step to fixing your problem is to sort out all your debts and start paying them off. If you don’t work out some sort of repayment plan, you’ll never be able to start your credit repair.
Once everything is organized and under control, you can formulate a rebuilding strategy. A big part of rebuilding means convincing creditors that you are able to make payments responsibly, which could mean getting more credit. Credit repair loans can be a great way to start rebuilding your credit score.
That’s right. It seems counter intuitive, but getting more credit is sometimes the best way to rebuild bad credit. Products like bad credit loans or secured credit cards are designed for people with credit problems and can really help the rebuilding process.
As long as you make your credit repair loan payments regularly and on time, your credit score will gradually increase and you’ll be back to where you want to be, in the good graces of creditors.
Just remember that bad credit loans, credit repair loans and similar products used to rebuild credit are meant to help you get back on your feet. If you use them strategically and only as a means to an end, you’ll do just fine. However, if you start exhibiting the behavior that landed you in hot water in the first place, you’ll only repeat the process and be in even worse shape.
It’s also important not to apply for too many bad credit loans or other credit products while you’re rebuilding. Your credit will be checked with each application, and it might affect your credit rating if you apply too often.
How to Stay Out of Trouble
Once you can see the light at the end of the tunnel, your job turns to staying out of trouble from that point on. Some points to remember for avoiding a repeat performance include:
- Creating a budget and sticking to it
- Using the credit you do have responsibly
- Paying more than the minimum on any future debts
- Talking to an expert if you need help
Rebuilding your credit won’t happen overnight, but if you’re determined and you’re patient, it will happen. Take the valuable lessons you’ve learned from being in credit purgatory with as you move forward, and it’ll all be just a distant memory soon enough.