How to Rebuild Your Bad Credit Profile
Anything can happen that leads someone to have bad credit such as the loss of a job or illness. Bad credit happens to good people, and you are not alone if you have bad credit. Although, you still have alternatives such as personal loans with bad credit, it is important to improve your credit score. So how do you rebuild your credit history and get back on track. Here are some tips from DrCredit:
First, understand that there are no quick fixes to this problem, late payments and charge offs do not go away quickly but with time and discipline these items will slowly disappear. Therefore, steer clear of companies that offer to eliminate your poor credit history quickly. Usually, these companies are not legitimate because legally late pay, judgements etc stays on your credit profile for several years.
Second, get your credit report from the three credit reporting agencies, Equifax, TransUnion and Experian every year and check them for accuracy. The Fair Credit Reporting ACT (FCRA) requires that each credit agency offers consumers a free copy of their credit report annually, so you should not have any problems obtaining yours. After examining your credit report, start applying strategies to get you back on track
One strategy you can use to rebuild your credit is to open a secure credit card, and many banks will let you open a secure credit card. What you do is deposit a set dollar amount and the bank will use that amount as your credit limit and give you a credit card. Depending on your individual situation, you can pay your bill on time and apply for a regular credit card in about a year or two. You can also use your home or car if they are fully paid as collateral for a loan as these types of loans are easy to obtain. Of course, this approach comes with risk because if you do not pay the lender will take your property.
A final strategy to rebuild your credit, pay all your current bills on time and pay extra towards the principle. If you have a tendency to forget your due date, use your electronic devices and set up email or text alerts, or write the due dates down on your calendar. Following a schedule overtime your credit rating will improve and the late payments would be a thing of the past.
If you apply some of the suggestions in this article, be patient and live within your means, you will soon see a big improvement in credit standings.