What are some good ways to rebuild credit?
Steamed Bean Bun asked:
What are some good ways to rebuild credit besides paying credit cards and bills on time? We already do these things and wanted to know if there was anything else we could do.
What are some good ways to rebuild credit besides paying credit cards and bills on time? We already do these things and wanted to know if there was anything else we could do.
There are five basic components to your credit score. Paying your bills on time is only one of them.
Another is length of credit history, and there’s not much you can do about that since it’s governed by time. Just don’t close your oldest accounts and shorten your history.
Your debt to credit ratio is another. This is a formula that shows how much you owe versus how much credit has been granted to you. The lower the ratio the better. For example, if you’ve been granted $10,000 in credit and are using $9000 of it, you have a high ratio. But if you’re using only $3000, you have a much better ratio. So, paying down your overall debt helps a lot.
They only way to build or rebuild a credit score is to borrow money and make payments on time. The only way to keep a high score is to keep borrowing money and keep making payments on time. It’s basically an “I Love Debt” score.
Building credit is the biggest joke of the 21st century.
If you pay as you go. If you live on less than you make. You will not have any payments. You will have money and not have to worship at the alter of the almighty fico score.
I would recommend 2 things: 1) a very low cost (possibly free) credit repair program to try to have the negative items removed. 2) I would add a tradeline program to boost your score quickly (60 days or quite possibly less). A friend in California used this and got a 120 point bump from 560 to 680. My friend in California went through and called their toll free# or filled out the free evaluation form to get the ball rolling. Good luck.