Rebuilding Credit History

There are several ways one can rebuild their credit history or if they want to get their first credit card:

1. Check the credit report: Contact all three credit bureaus and get a credit report from them. Federal law entitles you to get one free report from each of the three major bureaus once a year. One can order reports by calling 877-322-8228 or by visiting www.Annuaalcreditreport.com. Once receiving the report see if there are any errors, outdated information, or if you are a victim of identity theft. If so, one has to clear them up before applying for new accounts.
   
   
2. Checking and Savings Account: Set up checking and savings accounts. Usually, lenders see these accounts as a sign of stability. Make sure that you don’t bounce any checks.
   
   
3. Apply for the right credit card: Get a right credit card for your situation. For example, if one is a college student who has no credit history, if will be difficult to get a Visa or Mastercard. One can apply for Amex cards, but they usually charge a fee. However, one can start a credit history started this way. Sometimes they wave their fees for the first year. Whatever the case, don’t go overboard. Limit yourself with not more than one or two cards.
   
   
4. See if someone could co-sign: One can build the credit faster if one can convince someone with good credit history to add you as an “authorized” or joint user on a credit card. But this has a draw back that if for any reason the person who sponsors defaults payments, your credit history will be also tarnished.
   
   
5. Get a installment loan: For someone to have a good credit history, one should have both revolving accounts (eg: credit cards, lines of credit) and installment accounts (eg: auto loans, personal loans, mortgages). If one opts for a loan, make a large down payment so one can refinance in a year or so when their credit has improved.
   
   
6. Safe guard your credit: One has to use the card regularly to generate a credit score. Don’t charge more than you can pay off each month or 30% of the card’s limit. Pay all your bills on time, all the time. Don’t take too many cards or loans, a few accounts is enough to build a good score.
   
   

If you or someone you know have credit card debt problems and needs help, contact info@debtfreeafterall.com. They can help in debt settlement, debt reduction, and debt negotiation.

Article Written by Naz