Bad credit can make ordinary life difficult. It seems everyone from the landlord to the cell phone company wants to check your credit these days. And if it doesn’t look good, they don’t want to deal with you. If only there were a way to get your credit back.
Actually, armed with a sincere desire to salvage your reputation and the following tips, it’s not impossible to resurrect your credit score with a little effort.
Fix What Went Wrong
Whatever it was that got you into your current mess, you have to fix it so it doesn’t keep happening. It’ll be pointless to try to rebuild your credit if the same mistakes keep sabotaging you.
Make a Budget
Whether it was lack of appreciating your income and expenses or a one-time event that tanked your credit, you have to make a budget to keep from unwittingly digging yourself into another hole.
In fact, you have to make budgeting a habit. As you get your credit back, you’ll have new opportunities to overspend unless you’re constantly aware of what you can afford.
If you don’t have the discipline to manage your expenses so you have a little extra cash each month to put in a savings account, it’s unlikely you’ll be able to afford the payments if you buy on credit.
Whatever you can afford to save without raiding your savings a month later is what you can afford in payments. If that happens to be zero, then don’t borrow. You’ll just be setting yourself up for phone calls from new bill collectors. Perhaps that’s harsh, but it’s true. And you need the truth right now.
Get a Co-Signer
If you can afford the payments for certain necessities (a car or appliances, for example), try to find someone willing to co-sign for you. If your name appears first on the loan, you receive the credit on your credit record for a good payment history. Relying on the co-signer’s credit score can also reduce your interest rate and make monthly payments more affordable.
Pledge Savings for Short-Term Credit
If you’ve saved the money or you’ve come into unexpected money with which to make a significant purchase, such as a new bed or refrigerator, don’t pay cash. If it’s unexpected money, add it to your savings, and pledge the savings account for short-term credit, say 30 to 90 days.
Some neighborhood stores may not report to credit agencies so your good payment history might not be reflected in your credit score. But you can still give a landlord and some other creditors the store’s name and phone number as a credit reference.
Always Pay Your Rent on Time
Your landlord can also be a great credit reference if you always pay exactly on time. Do whatever it takes to not be even one day late, and your landlord will very likely give you a glowing reference.
Each little credit success you create leads to better credit, one step at a time.