So you have bad credit, now what?
So you have just applied for a credit card and you have been denied. Or you went to get a cell phone, and you were denied a plan without a HUGE deposit. What steps can you take to rebuild you credit? Here are a few:
1. Request a credit report:
Most people do not know that you are allowed by law one free credit report from each of the big three credit reporting bureaus each year. The big three are: Equifax, Experian and Trans Union. Now if you figure that out in your head, that means that you can get one free credit report roughly every quarter, or every three months. Now, they will not give you your credit score, they will give you the report. This will outline every open accout, late payment, every account that went into collections and so on.
2. Examine the report carefully:
When you get the report, make sure that you go over that report with a fine tooth comb. It is important to realize that your credit is literally your trustworthiness to lenders. When you walk into the bank to get a loan for a car. The loan officer does not go by a judge of character, they will go strictly by numbers. The loan officer is not going to say to themselves, ” Wow, this guy has a nice suit on and it really looking sharp today. I think that I will give him a loan.” Now that would be nice if they would do that, but that is not how the cookie crumbles.
3. Divide and Conquer:
It is important to not let your self get too worked up over this. This is very important, but not a life and death situation. It’s imperative that you do not let your debts go unresolved. Make sure you have a plan installed. Do small things to improve your bad credit. Open a savings account at a bank. Once you open and start to save money, this shows banks that you are taking initiative to improve your financial status, and save for the unexpected. Make payments on time. This is one that usually slips by people. I myself have let that happen to me, and it came around to bite me in the hind quarters. Making your payments on time will greatly improve your credit score for the long run. If you have unpaid bills, and they have gone to collections, make a concerted effort to contact the collection agency to make the full payment or settle on a price you and the collections company are comfortable with. Remember, unpaid collections are fare worse than paid collections.
Remember that these are just a few of the steps to take at revamping your credit report and score. Folks, it’s not going to happen over night and suddenly you will wake up and be approved for a $500,000 mortgage from the bank. Like with most things in life, it only takes a short time to ruin, but a long time repair.