My short bio: In October of 2012 I returned to work from lunch and stopped by the restroom. Instead of urinating like normal, I had a small stream of blood and…
Tips For Rebuilding Poor Credit
Tips For Rebuilding Poor Credit
Posted By: Tyler N.
Finding yourself in debt can be a very stressful experience, and can lead to many long-lasting financial repercussions. As virtually all formal types of debt in the United States are accompanied by an interest rate, any loans that remain unpaid for long periods of time will grow and be far more difficult to address in the future. Even if the individual happens to find a way to solve their financial problems and even completely erase their debt, the record of these problems may remain in their credit history for many months and even years. In the meantime, these individuals will have a much harder time being approved for any lines of credit, and any loans they ultimately receive will likely come with higher interest rates than those offered to other borrowers without these negative marks in their credit profiles.
Consequently, rebuilding your credit history and raising your credit score should be considered your next priority after erasing your debt. The first thing to recognize is that this improving your score will take time, and while your score can plummet after only one missed credit card payment, it will take many months for any positive change or behavior to be reflected in your score. It is important to avoid making the same mistakes that could have led to the decline in your credit rating in the past as even one misstep can erase months of hard work spent on rebuilding your credit profile. In addition, you should formulate a monthly budget, and examine any and all expenditures or outstanding debt obligations that may interfere with your current credit rating. You should ensure all your monthly utility bills, mortgage or car payments are taken care, and all the payments are sent before their due dates, as late payments will appear in your credit history and decrease your score.
The best, quickest, and arguably the only way to significantly increase your credit rating, is to apply for a line of credit and show that you can efficiently manage your financial obligations. Many individuals, who may have faced difficult financial situations in the past that forced them to default on their loans and declare bankruptcy, may be wary of applying for new credit cards. However, it is important to recognize that a credit card - as long as it does not come with an annual fee or any other periodic charges regardless of use - does not translate into future outstanding debt obligation. If used properly, these financial instruments can actually save you money, as well as increase your credit score in the process. There are numerous credit card offers that now come with cashback rewards programs, offering their clients 1-5% of their money back on certain eligible purchases, while charging no annual fee for these benefits. On the other hand, individuals with very low credit scores may find themselves ineligible for these offers, and may have to apply for less generous credit cards, offered by their local banks and credit unions. Ultimately, the most important factor will be to use any received credit card responsibly and make all necessary monthly payments before their due date.
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