7 Steps For Rebuilding Credit

If you want to make sure your loan application is not rejected when you need it the most

, make sure that you have an impressive credit score. Here are seven steps for rebuilding credit which will help you put things on track.

Falling behind on your monthly payments is easy to do and it can severely affect you in a negative way on your credit report. This means you may have a lower credit score. Why do you need a good score on your credit? When you apply for credit or a loan from a bank or lender, they will check your score to determine whether they trust that you will pay them back. The higher your score, the better that you look and the easier time you have with getting a loan. Your interest rates will also be lower and make your monthly payments and overall amount of money you pay in interest lower. Overall, you save more money when your score is higher. So how can you increase your credit score? Here are seven steps that will help you to rebuild your credit.

1. The first thing that you should do to start working on your score is get your free credit report. The three credit reporting agencies all have different reports, so you need to get all three and check them over for errors and other issues.

2. The second step is to dispute any items on your report that are false or older than 2 years. Send a formal letter to the creditors requesting proof of the debt; if they are unable to prove these debts then you have the legal right to have the item removed from your report.

3. The third step to increase your credit score is by calling your creditors and requesting that they remove late payments from your report. This is called a goodwill request and if you have been a customer for a few years, you can usually get them to remove these blemishes from your report.

4. The fourth step that you can use to increase your credit score is to open up new lines of credit, thereby increasing your amount of available credit. The less debt you have as compared to your credit, the better your credit score will be.

5. The fifth step is to take out a small personal loan and pay it off over time to show that you are trustworthy.

6. The sixth step is to piggyback on someone elses credit by having them add you as an authorized user, which can help you rebuild credit easily.

7. The seventh step is to pay down as much of your debt as you can.

Try some of the above 7 tips to raise your credit score. Your credit score is an important factor in whether you are able to get the things that you need, such as a car or a house, so it is imperative that you get the score up as high as possible.

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by: Courtney Dawson

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