It’s much easier to diminish your credit score than it is to rebuild it. If you’ve experienced a drop in your credit score for reasons like Medical bills, Late payments or Carrying a significant amount of debt, re-establishing your credit score to something higher is not going to be a quick. With determination and a plan, you can re-establish your credit.
There a few steps you’ll need to take if you want to re-establish your credit. First, it is essential that you gather a recent copy of your credit report. This is to make sure that all of your information is being reported accurately and is up-to-date. Any old or wrong information will negatively affect your credit report. If anything is wrong, you’ll have to file a dispute letter to the credit bureau that is reporting for you. There are several free online tools you can use to check your credit score (named here). You also have the right to pull your credit score once per year. For additional information you can check out the Federal Trade Commission’s website http://www.consumer.ftc.gov/topics/credit-and-loans
Second, you’ll want to create a detailed debt payment plan. Make a list of all of your creditors and figure out how much you will be able to afford in payments every month. Your credit will improve as soon as you begin to pay off your debts.
Next, don’t live outside of your means. People end up with low credit scores from spending more than they can’t pay off in the future. Spending outside of your means is usually how you end up with tons of debt and a low score. Budget your money and do not overuse your credit card.
Finally, sometimes it can take a while to restore your credit score. Some people choose to take out a small loan to potentially refinance and/or consolidate their debts. Approximately 40 % of Cumulus Funding’s customers use our Income Share Agreements to consolidate other debts. This is a good way to restructure your debt into one easy payment (toward the contract every month) as opposed to several credit cards and other debts.
Re-establishing your credit is not a short-term process. It may take a while to firmly secure a better score. Tips like managing your money wisely and managing your expenses proportionate with your monthly income can be small steps to further your goals. Some experts instruct those with low scores to establish additional positive account activity sources, such as opening utility accounts. Positive payments towards gas, electric, cell phone bills or cable television providers can help your score, if you pay on time every month. It will take time, but with these tips you can positively affect your credit score in a few months.