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Rebuilding Credit History |
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There are several ways one can rebuild their credit history or if they want to get their first credit card:
- Check the credit report: Contact all three credit bureaus and get a credit report from them. Federal law entitles you to get one free report from each of the three major bureaus once a year. One can order reports by calling 877-322-8228 or by visiting www.Annuaalcreditreport.com. Once receiving the report see if there are any errors, outdated information, or if you are a victim of identity theft. If so, one has to clear them up before applying for new accounts.
- Checking and Savings Account: Set up checking and savings accounts. Usually, lenders see these accounts as a sign of stability. Make sure that you don’t bounce any checks.
- Apply for the right credit card: Get a right credit card for your situation. For example, if one is a college student who has no credit history, if will be difficult to get a Visa or Mastercard. One can apply for Amex cards, but they usually charge a fee. However, one can start a credit history started this way. Sometimes they wave their fees for the first year. Whatever the case, don’t go overboard. Limit yourself with not more than one or two cards.
- See if someone could co-sign: One can build the credit faster if one can convince someone with good credit history to add you as an “authorized” or joint user on a credit card. But this has a draw back that if for any reason the person who sponsors defaults payments, your credit history will be also tarnished.
- Get a installment loan: For someone to have a good credit history, one should have both revolving accounts (eg: credit cards, lines of credit) and installment accounts (eg: auto loans, personal loans, mortgages). If one opts for a loan, make a large down payment so one can refinance in a year or so when their credit has improved.
- Safe guard your credit: One has to use the card regularly to generate a credit score. Don’t charge more than you can pay off each month or 30% of the card’s limit. Pay all your bills on time, all the time. Don’t take too many cards or loans, a few accounts is enough to build a good score.
If you or someone you know have credit card debt problems and needs help, contact info@debtfreeafterall.com. They can help in debt settlement, debt reduction, and debt negotiation.
Article Written by Naz
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