Here at Credit Rent Boost, our aim is to do one thing. To help you, our audience and clients, to get our financial wellbeing back! That’s why we offer our rent reporting services, why we write these blogs, why we do everything we do – to help folks get back on track. This time on the blog we are looking at how to rebuild credit, the multiple steps a person can take.
How to Rebuild Credit
Whatever the reason your credit is in the pits, there are always things you can do to start rehabilitating it.
Use a Secured Credit Card
We have talked about secured credit cards before as a way to start building credit in the first place, but their real power is in helping rebuild. As mentioned, secured credit cards are backed by that initial cash deposit to guarantee the credit issuer doesn’t lose money (and more importantly the user doesn’t dig themselves into further insurmountable debt). Use the card like you would any other, pay off the balance, and your credit will start to reflect this positive behavior.
Note: Be sure the issuer reports payments to the three big credit bureaus, otherwise this won’t help you rebuild your credit.
Get a ‘Fresh Start’ Loan
These have a few names they go by including ‘Fresh Start,’ ‘Credit-Builder,’ ‘Starting Over’ loan or others. This kind of loan does exactly what it advertises on the tin. Going through a credit union or small community bank, as a member you can apply to receive this special kind of loan. You will have to be able to provide proof of ability to repay and then make payments before receiving the loan amount.
After paying off the amount owed, the loan funds will be disbursed for your use. These on-time payments are also reported to the credit bureaus, showing your positive credit behavior to the financial institutions. Nice!
Become an Authorized User
Getting your own credit line can be increasingly difficult when you have a bad credit score so you may need to take whatever steps you can. While it won’t offer you a huge boost to your credit score (for reasons we’ll mention shortly) it can be a start! Ask your significant other (or whoever) if you can become an authorized user on their card. The primary account holders can set individual spending limits or even just not give you access to your own card if that makes them more comfortable, as they are still the person legally responsible to pay the bill. This means that a) it doesn’t reflect too much on your credit score as you’re not the one paying and b) it can also hurt you if the primary account holder doesn’t pay their bill on time. Think about this one carefully before deciding.
Have a Co-Signer
This is another option that requires help from someone else with a good credit score. When applying for credit you may be able to have a family member, friend, or significant other co-sign on the card or loan with you. This is a huge favor you are asking of them, their credit score is put on the line and you know how difficult it can be to recover from that! If you are late with payments the co-signers credit score can take a hit too, and they may also be denied other additional credit for themselves because of it.
While this step is possible, really exercise caution here. If you’re not ready to be financially responsible for those monthly payments necessary, you might overextend and damage not just your own credit but your co-signers, and your relationship to boot.
Opening up a new trade line that reports on your already established history of on-time rental payments can give your credit health the shot in the arm it needs! Read more about the benefits of using Credit Rent Boost and enroll now!
We hope these steps help you get your credit score back, and you may have to take all of them to really see a benefit. After all, it wasn’t one misstep that took your credit down but a combination of poor choices, terrible luck, and rough finances that go you there. But take this to heart, make the first step today, and keep going forward. One day soon, you’ll have a credit score, and the experience getting it, worth being proud of. We’ll catch you next time on the Credit Rent Boost blog!