Tips On Rebuilding Your Credit Score

Credit reports impact your credit score, and the reports contain the financial activities you’ve done for the last quarter or year. Your score will affect your ability to gain credit and approval for loans, mortgages or credit cards with low interest fees. You’ll be paying higher bills or get rejected if you have a poor score that instantly puts you in the high-risk category. Here are a few ways to rebuild your credit scores. 

1.     Use Your Credit Card

If your debts are not too heavy on your credit cards, resign all but one of your credit cards. Ensure all resigned credit cards have no debt. Now, this single credit card’s purpose is to help increase your credit score. Use it to purchase small-priced items or items that your actual money could afford to pay on time and in full. A good performance in paying your credit bills on time can boost your credit score.

2.     Develop Good History

A good financial history is reflected by the length of time your credit is in good standing with another creditor. With a low-balance credit card fully paid on time and in full every month, your good history develops over time. By a year, you could upgrade your credit status to a good standing that could get you an average-interest loan from a high-risk, high-interest one.

3.     Separate Supplementary Accounts

If you’ve recently had a divorce or if you have shared properties with a business or company you owe, separate these supplementary accounts legally. Supplementary accounts allow other people or establishments to use your line of credit, which can affect your score when things get sour.

4.     Correct Inaccuracies

If you could correct any erroneous or outdated information listed in your credit reports, a good credit score boost may just be in the corner. Initiate a dispute  whenever necessary and don’t be afraid to use this legal right.

5.     Avoid Bankrputcy

When you’re deep in debt, avoid filing for bankruptcy if you still have a capacity to earn money. Bankruptcy is for people who are retired, disabled and unable to get income because of their incapacities. Even if 80% of your income goes to your debt, to protect your credit score, avoid bankruptcy filing.