for Rebuilding Credit
Your Starting Point
Obtain a copy of your credit report from all three credit bureaus
so that you have a clear understanding of what is says about you
and your current credit scores.
If there are errors on your credit report, have the credit bureaus
investigate and correct them. Set goals and time frames for future
major credit endeavors.
Today – Homeowner Tomorrow
If you recently filed bankruptcy or if you don’t have any
open credit, it is necessary to have new positive items being
reported on your credit report. Try to obtain several new accounts
or sources such a secured credit card, department store cards
or being put on someone else’s account as an authorized
user. The lower your starting credit scores, the more your need
to have positive items reporting.
secured cards remember the following:
carry over balances as the
interest rates are very high.
one thing on credit that you would normally pay cash for –
say for $20.00 and as soon as the bill arrives write the check
and pay the bill. If paid in full during the 25 day grace period
no interest is charged. Follow this practice consistently and
NEVER miss a payment.
Older Accounts Open
If you already have credit open, keep the accounts you have had
for the longest period of time. Even if there were late payments
on it in the past, pay it on time now and the length of time it
has been open will help your credit.
Make Your Payments On Time
Down Your Credit Card Balances
Target to have the total amount of outstanding revolving debt
at 40%, or less, of the total available credit limits.
new positive sources are created, avoid all unnecessary inquiries
– don’t fill out any additional applications for credit.
For home purchase or refinance, old collections/judgments/unpaid
taxes/ unpaid child support/ must be dealt with. Look at the date
of the item, compare to statute of limitations for that item,
and plan a strategy to address each.