Cleaning Up a Bad Credit History
- Author Jennifer Quilter
- Published March 23, 2010
- Word count 410
So you've had a rough time in the past, but you feel like you've gotten things together now, and you're ready to be free of your bad history. Being ready to face it all is the first step, so good for you! Sadly, there is still a lot ahead of you. Be aware upfront that cleaning up a bad credit history will take time and things will be much easier for you.
As I said, the first step is facing your history, and in the vein the first thing you need to do is get a copy of your credit report. This will help you map out what you need to focus on with your credit building plans. The first thing you'll want to look this over for are mistakes. For instance, are any accounts that you've paid off marked as overdue or open when they're closed? This is something to contact the company about and have fixed. Another common mistake is your limit on your cards being marked lower than it should be. An important factor in your score is the amount of credit available to you versus the amount you have used, which makes this an important thing to call to have fixed.
Now that you've done this you'll want to see if your history is made up of entirely one time of account. Your history is made up of two main types of payments: revolving (credit cards) and installment (loans). If you have a lot of good card use in your past, making your payments on time each month over a period of years, then your good here. If not, you'll want to work on that. You'll also want to have a loan in your past that you've paid in full and made all of your payments on time on. If this is missing you'll want to consider taking out a small loan.
If you currently have a low enough score that you can't get a card or a loan you'll want to start off with a secured card from the bank, and after six months to a year of using that card lightly you'll want to look into a small loan-if you have some form of collateral to use for this you'll be offered a much lower interest rate.
The most important thing to remember when cleaning up a bad credit history is to make payments on time, and fix all of the problems you can.
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