Whether you’ve been through a divorce, suffered a bankruptcy, fallen victim to repossession or simply made some bad decisions when you were younger, there are ways to get your credit back on track. Despite the tons of resources online for credit repair, almost all of them cost money. Here are a few suggestions that may help ease the otherwise long and drawn out process of rebuilding.
Talk to Your Bank
If you have a checking or savings account, make an appointment with the bank Loan Officer. Explain that you are interested in rebuilding your credit, and ask what options the bank might provide. Quite often one option is a secured credit card. With a secure credit card you supply a deposit, usually as little as $300 and are in return given a credit line equal to the amount of the deposit. The benefit of applying for a secure card through your bank, rather than through many of the national companies offering the same, is that a bank where a client already has an account established will often waive application and annual fees. Once obtaining a secure credit card, use it solely for purchases you would otherwise make, such as gas and pay it off at the end of the month. After six months to a year of good, on time payment history the bank will usually increase your spending limits and get you on the way to establishing non-secure credit.
A secured loan may also be an option. Often, for as little as $500 a bank will issue an account holder a secured loan for the same amount. The interest rates on secured loans are very low, and paying one on time for six months to a year will add an excellent report to your credit file.
If you do not have a checking or savings account, or are not eligible for one because of checks reported to chexsystems, look for “second chance checking accounts”. Accounts like this can help someone without a bank account start saving and working towards eliminating debt.
Run Your Own Credit Check
Take a look at your credit file and make a list of the companies you owe. Contact information for the companies should be listed on the credit report. In the case of a past due balance, attempt to contact the company and reach a settlement. Usually, if the account has been in collections for awhile, they will settle for a small percentage of the original amount. It won’t remove the listing from your credit file, but a paid account is better than a charged off account.
Challenge any inaccurate information. Big companies make mistakes too, and your credit shouldn’t suffer because of it. Read the details of each entry on your credit report, and contact any companies that appear to have incorrect account information listed. Sometimes this will result in the file being deleted altogether.
Second Chance Financing
There are a lot of opportunities for people with bad credit to obtain financing for an automobile, computer or some other expensive necessity. Apply for one of these accounts with the understanding that the interest rate will be less than desirable if approved. Unfortunately, credit repair isn’t completely free. Take out financing on an item you can afford and make the payments on time. If it is in your budget, make double payments or pay the item off early to avoid additional fees from high interest rates.
Talk to Your Landlord
If you rent property, your landlord may be able to report on time rent payments to your credit. Usually there is a fee, somewhere around $25 associated with reporting information to a credit bureau, but if you explain that you’re trying to rebuild your credit worthiness and offer to pay the fee, a good landlord should entertain the idea.
The path to credit recovery is long and arduous but well worth it. The day you’re able to finance items without paying the penalty for youthful mistakes, is the day you’ll be on your way to building a solid financial future.