Rebuild your bad credit rating now.

Just after a natural disaster, the first thing you have to do to is to get back into your home. Clear away the wreckage, clear away the damages. If your home was your credit, this part of the process would be the credit repair. Then, once you’ve removed the rubbish, you can start putting the frame back up and the walls back in. That part is rebuilding your credit. and we’re here to tell you “how to rebuild credit”

It is not enough to get your credit score back only into a higher score caused by old debts, you have to add some newer, more positive information to your credit report to get a better credit score. Just like when rebuilding a home, it requires that you first purchase new materials to build the home with. Similarly, rebuilding your credit means you get new credit.

Step 1 – Review your reports

Before you can start repairing your credit, you have to know what you need to repair. Your credit report will contain all the information you need to start repairing your credit. You’re entitled to your credit reports from all existing credit bureaus operating in your country. More than often, these are available for a small nominal fee.

Why should you order all credit reports from all credit bureaus? Some of your creditors and lenders might report only to one of the credit bureaus and since credit bureaus usually do not share information, it’s possible to have different information on each of your reports. Ordering all three reports will give you a complete view of your credit history.

Make an extra copy of each report in case you need to dispute information.

Read through your reports once you get them. Become familiar with the information contained in each. Using different colours highlighters or pens, highlight what you need to repair:

· Incorrect information, including accounts that aren’t yours, payments that have been incorrectly reported late, etc.

· Past due accounts that are late, charged off, or have been sent to collections.

· Maxed out accounts that are over the credit limit.

Step 2 – Dispute inaccurate information

You have the right to dispute any information in your credit report that isn’t correct. Your credit reports, should come with instructions for disputing credit report information. If not, send a letter to the credit bureau detailing the inaccurate information. It’s often helpful to send a copy of the report with incorrect information highlighted.

Step 3 -Tackle past due accounts

The payment history of your credit cards, loans, mortgage etc. makes up such a large part of your credit score, several past due accounts have a significantly negative effect on your score. Especially late payments on credit or Store cards. Bringing these up-to-date is crucial to improving your credit score. Your objective is to have all your past due accounts being reported as “current” or “paid.”

· Get current on accounts that are past due, but not yet charged-off. Do what you can to keep accounts from getting charged off.

· Pay off charge-offs.

· Work with debt collectors to take care of your collection accounts.

Step 4 – Bring maxed out accounts below the limit

Your credit utilization – your total debt compared to total credit – makes up 30% of your credit score. Having maxed out credit cards costs credit score points (not to mention costly over-the-limit fees). Bring maxed out credit cards below the credit limit, then continue working to pay the balances off completely.

Step 5 – Get new credit

After all negative items on your credit report have been put into shape, work on getting positive information added to your report. If you have some credit cards and loans being reported on time is very good. Make sure that you continue to keep those balances at a reasonable level and make your payments on time.

You might have to re-establish your credit by opening up a new account. Since past delinquencies can keep you from getting approved for a major credit card, only make one application. Multiple applications with several banks will negatively affect your scoring even if you are not proceeding with an application. This will keep your credit inquiries low. If you get denied, try applying for a department store credit card. Consider getting a secured credit card.

Other Good Tips

Salvage what you can. Don’t close accounts that are in good standing for accounts that are not. Continue making timely payments on all your current accounts.

Seek consumer credit counselling. If your debts are so overwhelming, creditors aren’t willing to work with you, and you can’t seem to come up with a payment plan on your own, consumer credit counselling is an option for getting back on track.

Once you have a better rating, you’ll find more financial opportunities. Here are five ways to rebuild credit and improve your future.

If you were successful in getting a new credit card, make small purchases on one of your new cards. When the credit card arrives in your mailbox, take a planned approach toward using it. You might consider using it to buy a very small item, in the range of $15 to $30. After making the purchase, set aside the money you’ll need to pay it off. Then, when the bill arrives, you’ll be ready to pay the full balance.

Repeat this process a few times, or until you feel comfortable using the card and paying off the balance right away. In doing so, you’ll build solid credit habits. You’ll also start to see your credit score rise after a steady flow of on-time payments.

Build slowly. Once you’re able to make small, regular purchases, you can start thinking about moving on. You could try a bigger purchase, but before you do, think about how you will pay it back. Then make the purchase, and keep paying your bills on time.

If you’re able to, pay more than the minimum amount due each month. Better yet, try to keep the balance on your account at zero by paying the full amount on the bill every time. If you have trouble remembering when the payment is due, set up a reminder system. Mark the date on your calendar or sign up to have email reminders sent to you a few days before the due date. All of these habits will help build your score over time.

Keep it under control. As you increase the activity on your credit card, remember to keep your spending in check. Find out what the limit is on the card, and don’t spend more than 30 percent of it. Let’s say your limit is $5,000. You’ll want to keep the total amount of your purchases under $1,500. By doing this, lenders will see that you use your credit wisely and don’t get carried away again as you would have to repeat all of the above steps all over again.