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Rebuilding Good Credit: Dos and Don’ts

Once you’ve travelled down the path of credit concern – are missing payments, are at or over your limits, are getting collections calls, or have filed a consumer proposal or bankruptcy, you may be thinking that there really is no way to get back. That isn’t the case. Even when it seems as though your credit is in shambles, there are ways to regain your footing. Rebuilding good credit is easier than you think if you take the right steps.

Step 1 – Get your credit report from both Equifax and Transunion – make sure there are no discrepancies and that you know what’s being reported. This should be done once a year, just to ensure accuracy. That being said, don’t do it too often because that may have an adverse impact.

Step 2 – Clear up any outstanding bad debt or items reporting to your credit that are damaging. This can be achieved by making settlements with creditors or, if you don’t have the ability to repay the debt in a reasonable period of time, consider speaking to a professional about proposal options.

Step 3 – Make sure you have sent proof of any debt you have paid off to the credit reporting agency by registered mail and request a subsequent credit report to make sure the correct information is reported. Often the credit reporting agencies take their time when updating so you want to make sure those bad debts are off the table right away.

Step 4 – When rebuilding good credit, do so responsibly:

  • Don’t apply for credit everywhere – too many applications for credit will hurt your credit. This makes you look like a credit seeker, one who is living outside of their means. That’s never a good sign to potential lenders.
  • Don’t max out secured credit cards – this will hurt your credit. Maxing out any credit cards is a major no-no actually, but secured cards are typically more heavily scrutinized.
  • Don’t make late payments – after bruised credit you have to make sure that you make ALL payments on time!
  • Do – look to obtain new, fresh credit that can help you rebuild. A small personal loan is a great option.
  • Do – make sure new credit reports to your credit report.

At Prudent, we know how tough it can be to climb out of a hole created by debt. If you are looking to rebuild good credit, we can help.

Get in touch today to discuss your options: 1.888.852.7647.

 

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