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.
2. Prepare a realistic budget.
3. If you're overdue on any bills, contact
your creditors right away.
4. If you have savings, consider using it
to pay as many bills as you can.
5. Be diligent about monitoring your credit
report.
6. Consider selling some of your assets with
cash value.
7. Consider getting a second job to pay off
your debts.
8. 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.
