If you have a poor credit rating and it’s preventing you from achieving your life goals, then the advice in this guide may be for you. By following these steps, you can begin building a new financial life that allows you to achieve the things that are important to you.
1: Check Your Score
First of all, make sure you get copies of your credit reports, so you can check if there are any errors. This is important because fixing incorrect information must be your first step to rebuilding credit fast. You will need to make sure that all the negative items on your reports are correct and necessary for lenders to see.
2: Get Organized
You’ll need to keep track of every penny you spend, so you can learn to borrow money responsibly. There are many great tools that allow you to track your expenditures, but choose whatever method is most convenient for you, just as long as you stick with it. This will help you to learn how to build credit, as well as save money and improve your financial situation.
3: Get a Secured Credit Card
A secured credit card is helpful for rebuilding credit because the money deposited in the account must equal the total amount of borrowed funds. For example, if you deposit $500, then you can charge up to $500. This is helpful because you cannot spend more than what you deposit. Secured credit cards are also easier to obtain than unsecured ones; therefore, this method of rebuilding credit fast is often available to anyone, even if you have a poor credit rating at the moment.
4: Get a Co-signer
If your credit history is too damaged for lenders to trust you on your own, then getting a co-signer for an unsecured loan or card can be helpful in rebuilding your credit fast. This person will be an extra guarantee to lenders that you’ll repay the money, and if you can show consistently responsible borrowing and repayment habits in a certain time period (such as six months), then the co-signer’s credit will be added to yours when calculating your score.
5: Avoid Loans Unless Essential
Whenever possible, you should avoid borrowing money. This is not always easy to do; however, it’s important that you find other ways of obtaining what you want if possible. For example, fix your existing car instead of buying a new one, and pay for furniture with cash or ask for discounts at your favorite stores. If borrowing is a necessity, make sure it’s a small loan that you can repay easily with no interest or finance charges. In many cases, getting a personal loan with bad credit is useful if you need extra help.
6: Credit cards are not your friends.
You should purposefully avoid using them whenever possible and instead stick to the methods listed above. There are plenty of reasons for this advice, but here are three essential ones: They tempt you to spend more than you can afford, they make it easier for you to build bad spending habits, and they increase your chances of making costly mistakes.
7: Control Your Spending
Finally, you should always keep an eye on how much money you’re spending. This means regularly evaluating your needs versus your wants and working out whether it makes more sense to buy something or wait until a sale comes along. Poor credit does not have to stop you from getting what you want; it simply requires more effort and planning beforehand.
