Re-Establishing Your Credit

If you need to reestablish your credit, there are a few different options to choose from, but it is recommended that you do more than one of these.

First, you may want to open a checking or savings account. Being responsible about maintaining your money in an account with a bank shows creditors that you are capable of handling money wisely. Having proof of living in your current residence for a minimum of six months and a record of stable employment is also necessary. This makes you look like less of a risk.

After doing that, you may want to take out a loan from a credit union or your bank. Depositing the money into a savings account will help reduce the interest you have to pay back on the loan, since that money is also accruing interest.

Obtaining a charge card from a department store is a good idea, as long as you make regular monthly payments. Maintaining this credit will help build your credit up. Remember that missing a payment or making a late payment will negatively affect your credit score, so be careful.

A secured credit card is the next logical step. One of these starts out much like a debit card, as you are limited by how much money you have deposited into your account. Over time, this limit can be raised or lifted so that your balance does not control your credit limit.

Responsibility is the key to reestablishing your credit. Do not get in over your head. Make sure that you can make all payments comfortably each month without having to neglect any one of your bills. It takes time to get your credit built up, so don’t expect this to happen over night. With patience and persistence, you can have good credit again.