Let’s be real with each other, a low credit score will basically hurt you in every facet of your financial life. For example, If you’re trying to obtain a home loan, car loan, or student loan, it will be almost impossible to be approved for a loan with a decent interest rate. Also, with a low credit score banks even make it pretty hard on you to borrow money for emergency purposes.
Now, one of your financial goals should be to always pay everything off immediately and not use credit cards if at all possible, unless an emergency arises.
Furthermore, a low credit score can have an adverse affect when applying for jobs, getting car insurance, or evening renting a car…
So it is important to rebuild your credit?
I think it is, and I have provided some quick tips how you can rebuild your credit in less than a year…
1. Always pay your bills on time. Make this your top priority. Pay them a week early so that you are SURE that they arrive on time. If you literally do not have enough money to pay them off on time, you need to either find other ways to generate income, or negotiate with your credit card company for a lower payment. For example you can start selling some personal items on Ebay, getting a part time job, or liquidating some assets.
2. Get a secured credit card and ALWAYS pay it off on time. Charge very small amounts and then pay them off. You can carry a very small balance if you want – $10 or $20 – but NEVER make your monthly payment late. After a year of on time payments, call the creditor, and request to the card to an unsecured credit card.
3. A Low Debt To Equity Ratio. Make it a priority not to charge more than 25-30% of your available credit. If you have charged more than 30 percent of your credit limit, then you should make it a priority to pay that card down first. The rational behind that is your credit score goes down when you have less available credit.
So as can you see rebuilding your credit to worthy credit score is definitely attainable and needed. By following the steps above you can rebuild your credit in less than a year.