1. Check into using a secured credit card. While they typically have higher fees and you have to pay a deposit to access them, they can help you build positive credit history. When selecting a secured card there are several important things to consider such as fees, do they report to the major credit bureaus, what happens to the money you secure your account with, and so on. Read our blog Positive Credit through Secured Cards for more on opening a secured card.
2. Once you have a card, use it lightly! Remember; only charge what you can comfortably afford to pay back each month. If you keep a balance you will lose money to interest fees and you run the risk of getting in over your head.
3. Use the 30% rule on credit card balances. If the credit limit on the card is $300, the most you should (ever) owe on the card is $100.
4. Keep up on your credit report. Know what is on there and keep negative information from being added. You can get your credit report for free, each year from all three of the major credit bureaus by visiting www.annualcreditreport.com.
5. How do you keep negative information from being added? Pay all of your bills on time. Even if you cannot go back and pay for debts you incurred five or six years ago, you can make the payments necessary to prevent new, negative items from being reported to the bureaus. Focus on the future!
There are no quick fixes for bad credit. It takes time, hard work, and dedication to overcome the obstacles bad credit present. There are other options that may also help you bounce back from damaged credit. These include debt consolidation plans, debt management plans, credit counseling services and more. To learn about all of your options and get a little help organizing, contact a certified credit counselor.
Your credit is an integral part of your success in life. Take the time to talk to an expert and find your best path forward!