Rebuilding Bad Credit

Rebuilding bad credit can take up to three years however you may be able to make progress in just a couple of weeks or months. Here are some steps you can take to improve your credit score:

1. Check your credit report: I am a big fan of using Credit Karma to check my credit.  It is free and you can check it every day if you want without it affecting your Credit Score.

2. Make sure every negative on your credit report is accurate.  If it is not accurate refute the negative.  

3. Pay your bills on time: Late payments  will have a major negative impact on your credit score. Make sure to pay all of your bills on time, including credit card bills, loan payments, and utility bills.  Just one late payment will have a significant effect on your credit score.

4. Keep your credit card balances low: High credit card balances can also negatively impact your credit score. Try to keep your credit card balances below 30% of your credit limit.  It is even better to have your balance at less than 10% of available credit.  Also if you have very high utilization on just one of your credit cards that will negatively impact your score compared to a minimal balance on a couple of your cards.

5. Limit new credit applications: Every time you apply for new credit, it can have a negative impact on your credit score. Try to limit new credit applications to only what is necessary.

6. Always pay your credit card in full every month.  If you let credit card balances grow you might slip into the Credit Card Debt trap.

7. Consider a secured credit card: A secured credit card is a type of credit card that requires a cash deposit to open. These cards can help you rebuild your credit by allowing you to make small purchases and payments, which are reported to the credit bureaus.

8. Get a co-signer: If you have a friend or family member with good credit, you might be able to get approved for a loan or credit card by having them co-sign the application.

9. Seek credit counseling: If you are having difficulty managing your credit and debt, consider seeking credit counseling from a reputable agency.

It's important to know that rebuilding bad credit takes time, and you may not see improvement overnight. It may take several months or even years to see a significant increase in your credit score, but by consistently following these steps and being mindful of your credit usage, you can improve your credit over time.