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How to Rebuild Credit in 1-2-3

prudent2When debt starts to pile up, many of us assume that, with time, we will eventually get things straightened back out. Then a holiday hits, or an unforeseen car repair, or a vacation splurge. Again we turn to those credit cards to get us out of a bind or to make a big purchase, often with the intention of paying off the entire bill once it comes in the mail. But then the bill comes, and we think, oh not this month, but next month for sure. Eventually that turns into next year and before we know it we are facing an Everest-sized mountain of debt – and the challenge of how to rebuild credit that seems to have taken a major hit!

When debt becomes overwhelming, it can be tough to establish a strategy for getting rid of it – and then knowing how to rebuild credit. So, here are three easy steps to follow to do both:

Step one: get rid of existing debt. This can be achieved a number of different ways – and the best course of action depends on a few different factors. Number one is the total debt owed – the more you owe, the fewer your options may become. Paying it off with a personal loan, making a settlement with collections, or a consumer proposal or bankruptcy are all options to consider.

Step two: work on rebuilding credit. Once you’ve settled the debt, focus on rebuilding. This will involve a few sub-steps.  Firstly, make some positive credit moves that demonstrate a desire to improve. Obtain a personal loan or secured credit card, making monthly payments on time, every month. Set a realistic weekly/monthly budget based on what you can afford and stick to it.

Step three: learn from the mistakes of the past. Don’t borrow more than you can afford to repay, and don’t assume one late payment here and there won’t matter.  Try to stay away from unnecessary purchases that can’t be purchased with money in your bank account (meaning they have to be purchased on credit). Don’t become a credit seeker – applying for new credit cards or using the ones you’ve worked hard to pay off.

The best way to start rebuilding credit is to learn how to rebuild credit – and these three steps make it easy.

Need a personal loan but worried that your credit may not stand up to the test? Don’t be. Call Prudent Financial today – we have years of experience providing individuals with financing even in the presence of bad credit – including discharged and undischarged bankrupts. 1.888.852.7647.

 

 

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