How Do You Re-Establish Credit?
Follow the 10 Steps Below, know what payments are the most important and pay off the ones with the highest interest first.
Here are a few simple, effective steps that must be taken to re-establish your credit:
- Get a Job, Even Part-Time Job - Create Record of Steady Work ASAP
- Obtain Your Credit Report From the 3 Credit Bureaus - Ensure All Information is Correct. (You can send a 100-word statement to provide explanation of your situation if there is a problem.)
- Get Rid of Excess Credit Cards Once Credit Card Debts Paid - Keep Only Essential 1 or 2 Credit Cards. (This will go on your record as you have it in mind to use credit more cautiously.)
- If Applying for Credit Cards, Don’t Apply For Too Many At A Time
- Apply for Credit Card With Local Store or Bank
- If Not Able to Get Regular Credit Card - Apply For Secured Credit Card
- Open Savings Account & Make Regular Deposits
- Pay Your Bills On Time - Build Up Your Credit Score (This will also keep you honest about building up debt and bad credit again.)
- Open Checking Account - Make Sure None Of Your Checks Bounce (This will show that you are able to manage your finances responsibly.)
- Check Into Applying For Loan From Your Bank or Credit Union (Once you get your loan, make sure you make all the payments on time or, even before time, if possible. Before you do this, make sure that your lender reports all transactions to the credit bureaus since not all organizations do so.)
Once you have spoken with your creditors, prioritize your payments.
Priorities at the top of your list should include:
- Utilities, etc.
At the same time, pay off the debts with the highest interest first.
Bankruptcy Code & Fair Credit Reporting Act are Federal Laws.
Bankruptcy stays on your credit report for the same amount of time in all the states.
Consumer Credit Reports keep bankruptcy info for 10 years.
It takes 18 months of paying your bills on time to being reestablishing a good credit rating.