Your credit score is the single most important factor that decides your financial success. The process of re-establishing your credit rating after having suffered a job loss or some sort of family emergency may seem impossible, but the truth is starting from scratch is more simpler that you think. The hard part when it comes to starting over and raising your credit score is maintaining a consistent payment regimen with the credit bureaus.
The first step to raising your credit score is getting a copy of your free triple score report. Once you have copy of your report, it is important to examine your report thoroughly for mistakes. You should never assume that you report is accurate. You will be surprised at the amount of mistakes on your report. Some of the most common errors may include: reporting late payments erroneously, listing the same negative account multiple times, and reporting a family member’s account on your bureau. The best way to deal with mistakes on your report is to consult with a credit attorney.
Step number two in re-establishing your credit rating includes adding some good accounts to your 3 credit bureau report. It doesn’t matter how many negative items are removed, your score will not improve unless you re-establish some positive relationships with creditors.
One way of getting positive credit is by applying for a secured Visa or Mastercard. There are many companies that are willing to open credit card accounts with a security deposit. A Secured card is backed by your deposit which will then become your spending limit. In some cases, the secured card company may even start you off with a limit that is $100 dollars higher than your deposit. Make sure you find a company that reports your on time payments to all 3 credit reporting agencies.
The third step to increasing your credit rating is having a spouse or close family member with a positive credit rating add you on as a co-borrower. This technique although very effective is a little risky because if your sponsor stops paying their account on time, it will also affect your credit rating. There have also been rumors that the credit bureaus may stop reporting co-borrowers but for now it is still effective.
The fourth and final step to raising your credit score is making your payments on time. When creditors are looking at your credit report, they tend to look at your previous six months of payments. Your current payment history will give borrowers a picture of your present financial standing.
The credit bureaus will also continuously raise your credit score a few points for every month of timely payments. If you can afford to continuously make 2 years of on time payments, you will have succeeded in improving your worthiness with the financial institutions.
In summary, to take control of your financial future, you must first take baby steps. These steps include getting a copy of your report, removing bad accounts, adding good credit history and paying your bills in a timely manner. You may also want to consider step #5; getting identity protection to protect your good credit score.
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