Restore Your Credit

A damaged credit history can be improved over time. Follow these steps to get your credit back on track:

Don't give up. Restoring your credit takes dedication, patience and time.

1. Make a list of all the debts you owe, including creditor names and addresses.
Prepare a realistic budget.
If you're overdue on any bills, contact your creditors right away.
If you have savings, consider using it to pay as many bills as you can.
Be diligent about monitoring your credit report.
Consider selling some of your assets with cash value.
Consider getting a second job to pay off your debts.
Consider other sources of money, such as borrowing from your retirement account (as a last resort).

After completing these steps, there are still more things you can do.

Try to re-establish credit with former creditors. Contact former creditors with whom you had a good payment history. They may be willing to re-establish a credit relationship with you.

Consider offering security on a loan. Secured loans are tied to collateral, such as real estate or cars. Remember that if you default on a secured loan, your collateral may be repossessed.

Consider opening a secured credit card account. This credit is tied to a deposit in a bank account. You can charge up to the amount you deposit. Verify that the bank issues reports to the credit bureaus.

Open a co-signed credit account. A co-signer is a person who is willing to sign with you on a credit or loan application. In the event of nonpayment by you, the co-signer becomes responsible for the debt; both parties credit ratings are affected.

Don't open new credit accounts unless the terms are acceptable. Try to avoid "introductory" or "special offer" interest rates.

Don't be afraid to ask for help. Affordable financial advice is available. Above all, don't give up. Restoring your credit takes dedication, patience and time.


Restoring your credit



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