Have you ever really wanted something? Now I’m not talking about just wanting something at a store or anything, I’m talking about really wanting something but knowing that it is out of your reach, such as a home or a new car. Chances are, at some point in your life you have wanted something but haven’t been able to get it due to credit woes or financial difficulties. In fact, most people have been in this position and there really isn’t anything worse then being told you can’t have something you want just because you have a bad credit history. It’s usually at this point in someone’s life that they begin to turn around and look for ways to rebuild their credit and how to build a good credit base. If you haven’t yet been denied something you want because of credit count yourself lucky and know that you can beat the heat (so to speak!) and work on your credit ahead of time! Here’s how: Step One: What’s the problem with your credit score?
As with anything in life, the first step in fixing a problem means understanding that it is there and figuring out why it exists. If your bad credit history is because of your own financial mishandling then you’re going to need to take responsibility. If your bad credit history is because of something that you couldn’t control (job related injury, unintentional unemployment, ECT) then you won’t have to own up to anything, just understand that there is a problem that needs fixing. Next, you’ll need to understand that credit takes time to build and that you can’t just improve bad credit overnight, it is a timely process. Now, it is going to depend on how bad your credit situation is of course. If you have just missed a few payments on your good credit card or something then you won’t have a very long road to improving your credit score, maybe just a couple of months. However, if you have gone bankrupt once or twice in your personal life, you may have years ahead of you! The good news is that it will only take a short amount of time for you to see an improvement, slight as it may be, in your credit report. Next, you should get a copy of your credit report because you never know what you’ll find. In fact, over 80 percent of United States citizens have minor to major problems within their credit reports that aren’t even their fault! You can obtain a copy of your report by going to one of the three main credit bureaus, Equifax, Experian or Trans-Union. While all three may have slightly different information on you, they will all have basically the same stuff. In your report you will be able to see if anyone has had access to your financial information without your knowing (which is a federal crime) and whether or not your identity has be tampered with (identity theft is the fastest growing crime in the country!). The fact is, if you want a good credit history you’re going to need to make sure no one is messing around with your finances! If you do happen to find some information that isn’t accurate, even if it is just an address or an open credit account that you thought was closed, you should write a short (100-150 words) explanation on what your issue is. You’d be surprised at how much your credit score will be influenced by even the slightest of mistakes! Step Two: improving credit score wisely
Now that you have figured out (or owned up to the fact!) that there is a problem with your credit, it is time to dedicate yourself to a plan to fix it! This is how you do it:
• Come up with a payment plan: If you are in severe debt then you’ll want to talk to your creditors to come up with a detailed repayment plan. If you go to them ahead of time they will be more willing to help you. They may even be willing to lower your interest rates in order for you to pay off your debts! Creditors are more interested in getting their money and they know that if you file for bankruptcy they probably won’t get the money they are owed.
• Seek the advice of a credit counselor: Credit counselors (not to be confused with credit repair companies) are there to help people with their financial woes and to help you improve your credit history. They may start you off with a secured credit card if you have bad credit but soon with their help you will be out of debt and improving your credit history.
• Make your payments on time: The quickest way to fall behind in your credit is to fail to pay your bills on time. Now we’re not just talking about your credit card statements, we’re talking about all of your bills from rent to cell phones. Paying on time and in full will help your process of applying for credit cards online and getting the instant approval credit cards. Just like paying on time will improve your credit score, paying late will hurt you- don’t do it!
• Open some new credit accounts: If you really are serious about building your credit as quickly as possible then you are going to want to find a way to get on track with your creditors, or at least some creditors. Even with a bad credit history you can finagle a way into some sort of credit account. Whether it is a small loan or credit cards for bad credit get something! While you can do everything right, the fastest way to a better credit situation is proving yourself responsible. If you are having trouble getting creditors to back you, explain your mistakes to them and your willingness to improve your situation.
• Get a bank secured credit card: If all else fails, get a bank secured credit card. These cards are more like ATM cards because you can only spend up to the amount you have in your account. To get one of these cards just go to your normal financial institution and ask for one. While they won’t build your credit as quickly as a ‘normal’ unsecured credit card, they will still help you eventually get the card of your dreams!
Building a good credit score isn’t something that happens overnight. You can’t go from a college students credit card or secured credit card to the best rewards airline miles credit card, it just doesn’t happen that way. Have patience, have diligence and most of all have hope because good credit really isn’t out of your grasp if your reaching in the right direction!
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