If you have gone through some tough times in your life, you probably have a few financial scars left to show for it, including big hits to your credit. Now that those tough times are over, it’s time to get back on track. Here are a few tips on how to rebuild your credit.
To make the most progress, it is best to know where you are starting from. You are entitled to a free credit reports from all three credit agencies once a year. Take a look at all three. Look for any errors that need correcting and possibly any late accounts that you can easily pay off.
For any accounts that you currently have, make sure you pay each one on time. Late payments can be the biggest detriment to your credit. Conversely, on-time payments can have the biggest positive impact.
Credit utilization is another big portion of your credit score. This refers to how much of a balance you carry, compared to your credit limit. The ideal percentage is less than 30%. If you are above that, pay as much as you can afford each month to bring those balances down.
If you have a lot of closed accounts on your history, consider opening a secured credit card account. With this type of account, you deposit money as the collateral, and then it works just like any other credit card. Be sure the account is reported to all three credit agencies.
If you are having a hard time getting the credit you need, you can try asking a family member to co-sign with you. This is a huge favor since they are equally responsible for the balance of the loan. If you stop paying, it will hurt their credit as well, so make sure you can fully afford the loan you want.
Learn more about your financing options by visiting us at Larry Jay Mitsubishi.