A Better Credit Rating in 3 Simple Steps

The challenge with debt is that it’s often a slippery slope in that due to the interest and late fees, once you start missing a few payments your financial position can quickly go downhill – as can your credit history.  It’s therefore understandable that people in debt wish to get out of debt but sometimes it can feel so emotionally, and practically, overwhelming that people don’t know where to start.

I you’re looking to get your finances back on track, this New Year, then this quick summary should offer some easy-to-follow advice on how to repair your credit.  Of course, repairing your credit rating is a journey that can take some time; however, it’s entirely possible for anyone to turn their credit rating around regardless of their situation – even if you are facing bankruptcy.  These three simple yet fundamental principles will help you take the first steps on getting back on track.

1. Where are Things Now?

The first step is to check your credit report, and if your score is less than desirable then you are in the empowered position to take immediate action to start repairing your credit score.  The first thing is to check for errors; some credit reports contain many errors due to simple administrative error or complex issues such as identity fraud; be sure to check there are no late payments incorrectly listed for any accounts and dispute any errors you do find with the credit bureau.

2. Get Back on Track

If you have missed payments, then stop worrying about this – the damage is done – all you have control over is the current moment which will directly affect what happens next; and the best thing you can do moving forward is to ensure your bills are paid on time.  Sometimes, borrowing money can be a justifiable and viable way to consolidate your debts and get back on track

The trick is to get back on track by getting up to date with your bills, even if that involves negotiating payment terms so that no further damage is done to your credit file – and then stay on track.  If you have a few red crosses, then the remedy to that is to create many more green ticks; there is no remedy in burying your head and letting things spiral no matter how tempting it may feel.

3.  Rebuild Your Credit

One of the most important steps in terms of rebuilding your credit history is actually getting credit.  There are many financial products available specifically for the purpose of rebuilding credit.  As an example, there are plenty of credit cards for rebuilding credit that help people who have a poor credit score rebuild their credit.  Whilst these cards come with a pretty high rate of interest they are a great way to help rebuild your credit.

In summary, find out exactly where things are now, make a plan to get things back on track, and then take steps to rebuild your credit score by maintaining good lines of credit – such as making purchases each month on credit, then clearing the balance at the end of each month.