Rebuilding Bad Credit
So what can you do to recover and restore your good credit ratings?
If you’re suffering from bad credit reports don’t worry because there is hope and a way for you to rebuild your good credit standing. It’s important to realize that rebuilding a bad credit report is possible but it does take time and it’s not an overnight fix.
When it comes to rebuilding credit the goal is for you to establish a minimum of three positive accounts reporting on your credit reports as soon as possible. Once you obtain these new credit accounts it’s critical that you actively use them. Without continual use of your credit, eventually your credit reports won’t even generate credit scores.
Take the following three steps to get your credit reports back on track.
Step 1 Work on Repairing Your Credit Reports
According to the Fair Credit Reporting Act (FCRA) you as a consumer have every right to verify the accuracy of your credit reports. Whether you choose the “Do-It-Yourself” approach or hire a reputable credit repair service you should take all the necessary steps to repair your credit.
Step 2 Apply for New Credit Cards
At this time you may not be able to qualify for an unsecured credit card and the last thing you want is to get turned down multiple times resulting in excessive inquiries. It’s always best to start with a reputable secured credit card issuer that reports to all three major credit agencies.
Since you need at least three active accounts you may want to consider opening two secured credit cards if you have no other open accounts that are active. The top two secured credit cards for rebuilding credit are Open Sky Secured Visa Credit Card and the Platinum Zero Secured Visa Credit Card.
Step 3 Open a Personal Line of Credit
In an effort to sell more products some companies offer potential customers a personal line of credit to their stores. One company offers a credit limit that starts at $500-$1500 and best of all it reports to Equifax and Experian. This online store has over a thousand premium brand name items for you to purchase and up to a 25% discount off the manufacturer’s suggested retail price.
You can purchase electronics, jewelry, cookware, bedding, pet products, tools, home/office products, luggage and much more.
You can purchase products outright or use your credit line and make payments over time. If you decide to carry a balance then your minimum monthly payment will be 20% of the account balance or $20 whichever is greater.
Best of all there is no interest for 6 months! If you continue to maintain a balance after that period then there is a 17.99% APR.
Other fees associated with this account include:
- Account Maintenance Fee: $20 monthly
- Late Fee: Maximum allowable in your state
- Returned Check Fee (NSF): $30
You will be invoiced once per month 10 days prior to your due date. They don’t send paper statements so be sure to check your email that you used to apply for a personal line of credit. You can also check your account statement and balance by logging on to your account online.
For maximum impact to your scores each new account you establish should reflect the following:
- Active and consistent credit activity
- Positive payment history
- Debt to credit limit ratio not to exceed 30%
- High available credit limits
You can restore your good credit standing by taking proactive steps like these. Don’t let bad credit hold you back. Start rebuilding your credit today!
Looking to rebuild your personal and business credit? Become a member of my Business Credit Insiders Circle and gain access to a proven step-by-step business credit building system. A system that provides you access to personal lines of credit, vendor lines of credit, fleet cards, business credit cards with and without a PG, funding sources and lenders that report to all the major business credit bureaus. Submit your name and email below for details and receive a free audio seminar ($597 value) =>
About the author
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for AllBusiness, a subsidiary of Dun and Bradstreet and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.