Different Ways to Rebuild Your Credit

Credit cards, leases, and mortgages are designed to let people buy things that are essential and pay for them over time. Unfortunately, people often have to use credit cards for emergencies such as medical bills. A credit card can be tempting and people sometimes use them to pay for things like restaurant meals and vacations.

When you pay for multiple things with credit, you can end up being overwhelmed and you can end up with a bad credit score. If you have bad credit, there are a few things you can do to rebuild your credit score. Your goal should be to have a credit score of at least 700.

Get a Secured Credit Card

One way to build back credit is to get a credit builder card. You will simply apply for a credit card and pay a security deposit. Most companies will not do a credit check on you when you apply for such a card.

In most cases, the amount of your security deposit will serve as your credit limit. Once your card arrives, you will be able to start making charges on it. Every time you pay your bill by the due date, it will generate a positive report to the credit bureau. Over time, your credit score will go up.

You should be advised that companies that offer secured cards will often charge high-interest rates as well as fees. For the most success, you should pick a company that reports to all three credit bureaus. Most credit card companies will have an app that will remind you when payments are due.

Explore Alternative Credit Building Programs

If you don’t have $200 to put down for a deposit, there are still a few programs that are designed for rebuilding credit.

If you have a bank account, you may want to consider getting a debit card. This card does not require a credit check and it connects to your bank account. The card sets a spending limit for you that is based on the amount of money in your account.

When you buy something with the card, the bank pays it for you and takes the money out of your account the next day. There are some programs where the bank will actually report it to the credit bureaus as a credit card payment.

Experian offers a free program called Experian Plus that counts payments of your telephone or utility bills as an on-time payment. Whenever you pay a utility bill, you will increase your credit rating with Experian.

Dispute False Charges

It is not uncommon at all to find charges on your credit bureau that are simply not correct. Credit card fraud is rampant in the United States and you may be a victim of identity theft. Identity thieves are very hard to catch and those charges may be hard to remove. Reports of incorrect charges have increased in recent years.

If your identity was compromised due to the negligence of a particular company, they may be offering to pay for a credit protection program. If you do not know how your identity was compromised, it may be in your best interest to invest in credit protection of some kind.

You may also find accounts that are listed on your credit bureau as debts that you paid and closed years ago.

If you find incorrect information on any of your credit reports, you can dispute it. You can simply visit the credit bureaus’ website and fill out a dispute form. There are also some legal companies that will assist you with your dispute and help you analyze your credit as well.

Most of these services will charge a monthly fee to act as a liaison between you and the credit bureaus. Make sure to read online reviews if you decide that you wish to use such a service.

Having good credit is as much a part of the American dream as owning a house or a car. Rebuilding your credit can lay the groundwork for a happy and secure future.