Top 7 Ways to Improve Your Credit Reputation

how to rebuildAre you struggling with student loans or credit card debt? Does your credit score seem like it keeps getting lower? The average American carries a credit card debt of more than $6,000, and the figure keeps getting higher.

If you feel stuck and wondering how to rebuild your credit, this article is for you. We’ll take you through some easy ways that you can rebuild credit and help you take the first steps toward improving your credit score.

1. Pay on Time

We all want to pay our bills on time, but sometimes life gets in the way. If you’re just starting the credit rebuilding process, you should make sure to pay all of your bills on time.

Every time you’re late with a bill, it creates a “mark” on your credit record. Sometimes, these late payments can stay on your report for years. If you’re starting to fix your credit, make sure that you don’t incur any late fees.

An easy way to pay on time is to sign up for electronic bill payments. You can often do this through your bank online. Electronic banking saves you the hassle of writing checks or getting money orders, and you’ll never miss a bill again.

2. Monitor Your Credit Report

There are several websites that offer free credit reports to subscribers. You should get a copy once per year and review it to make sure that there aren’t any mistakes.

You might be surprised to learn that identity errors on credit reports are common. Your name and address might be wrong, and in some cases, you might have someone else’s accounts on your report.

Other common errors include listing a closed account as an active one, duplicate account reporting, and mistakes in the amount that you owe. Your credit could improve significantly just by monitoring your credit report.

3. Maintain an Open Credit Account

As you’re undergoing the credit rebuilding process, you should maintain at least one open credit account. It may seem a little bit strange to keep a credit card open, but it could help boost your credit score.

Part of your credit score is based on how well you manage your credit. Lenders want to see that you have open accounts and that you pay them off. As a general rule, you should only use about one-third of the credit that you have available.

Use your credit, but use it wisely. Always pay credit cards on time, and pay in full if you can. The key here is to prove that you’re responsible with the credit you currently have.

4. Apply for Credit, but Be Careful

Whether you’re in the process of establishing credit or repairing it, you need to know about credit inquiries. Basically, when you apply for a credit card or loan, the company checks your credit score.

These credit inquiries are called “hard” credit checks and stay on your record for two years. If you have too many, you could seem like you’re not managing your money well.

In general, you should only apply for credit in situations where you know you’ll get it.

5. Invest in a Secured Credit Card

One option for rebuilding credit is to get a secured credit card. You have to pay a set amount up front, but then your payments get reported like a regular credit card.

When you’re looking for a secured credit card, try to find one that doesn’t have a high-interest rate or annual fee. If you have several credit cards, see if you can combine them into a single monthly payment.

Building good credit can be simple, but it might take a few months before you see it improve.

6. Get a Small Loan

Another way to rebuild your credit is to take out a small loan or payday loan. You should search Google for “payday loans no credit check” and find a loan that has a low-interest rate.

You’ll get credit for repaying on time and you’ll be able to show other lenders that you have a positive track record. Again, you might have to wait for a few months to see the changes, but it’s worth it in the long run.

When you default on an account, it stays on your credit report for seven years. Bankruptcies actually stay on your credit report for 10 years. So have patience and realize that it may take a little while to rebuild.

7. Find a Co-Signer

If you have searched and searched and can’t get a secured credit card, you should find a friend or family member to co-sign a loan. Make sure that you can afford the loan first, but ask them to co-sign with you.

This is a good option for people who run their own businesses. Having delinquent accounts can severely hurt your reputation with sellers and customers. You need to make sure that your customers trust you and that your creditors get paid on time.

If you have a business, you should also monitor your online reputation. Negative reviews can hurt your bottom line as much as bad credit can.

How to Rebuild Rock-Bottom Credit

If you’re discouraged and wondering how to rebuild rock-bottom credit, don’t worry. It might take a little while, but following these simple steps will help you get your life back in order.

While you may be reluctant to confront your financial situation, you can only improve things once you know what’s really going on. Go ahead and order a credit report and start checking things out.

If your credit seems beyond repair, you might want to meet with a financial adviser. They can help you consolidate your credit cards and loans and come up with a plan to get you out of debt.

Rebuilding credit is one of the best things you can do for yourself. We offer a wide range of services for businesses that want to monitor their reputations and increase awareness of their brands.

There’s no reason for any business owner to struggle with a poor credit rating. Contact us for a free reputation audit and check out our blog for great business advice!