Many of us have been there – money is tight and it is the credit cards that bring up the slack. Or, perhaps the loss of a job or income meant some bills went unpaid one month, then the time playing catch-up just meant more and more problems. Wait, don’t stress. When your credit report is less than stellar, you may be wondering about the steps to rebuilding credit – but we’ve got them. Read on for some tips to help you rebuild your credit.
Re-established credit counts from the point that bad credit is resolved and new credit is gained – your payment and habits as they relate to new credit will dictate your rebuilt credit.
Before you can rebuild credit after bad credit has amassed, you have to make sure you have dealt with the bad credit. As long as high balances are owing your credit will continue to suffer, especially if those balances are close to or over their limits. Also, anything in arrears needs to be dealt with. If you are behind, be it 30 days or 4 months, those past due balances also need to be paid up-to-date. This may take some time, but it needs to be done.
Dealing with unpaid bad debts. These won’t go away on their own, even though the common misconception is that they disappear after 7 years. If the creditor keeps reporting them, they will continue to report unless challenged and even then they may continue to report.
What if you can’t pay off those balances in a realistic time frame? If it will take you months to even get past due balances up to date, you may want to look at settlement options to reduce those debts and consider leveraging assets such as a vehicle to secure a consolidation loan to pay off smaller accounts.
If you are loaded in bad debt and a timeframe for pay off would take you into the next century, don’t panic. There are options, one of which may be to speak with a trustee about solutions to get out of debt right away. For example, if you have really done a number on your credit, looking at a consumer proposal likely won’t make it worse than it is and you may actually recover faster.
Rebuilding credit means being trusted with credit again, and if you are in a situation where obtaining credit has become almost impossible thanks to this, Prudent Financial can help. You can use a personal loan to raise funds to obtain a secured credit card – then you will have 2 new credit items reporting to your credit – a loan and secured card.
Call Prudent today to discuss your options for rebuilding credit after bad credit has taken over. We can help: 1-888-852-7647.