Rebuilding credit takes time, but with some hard work you can get your credit back on track. Good resources for reestablishing credit include your credit reports, credit counseling services, and secured and department store credit cards. You can also contact your creditors and ask if they will remove negative information from your report.
Your Credit Report
To rebuild credit, you first need to know what is already on your report. You can get a free copy of your credit report every 12 months from each of the three major credit bureaus. When you get your reports, look over them and dispute any inaccurate information. Under federal law, credit bureaus have to verify information at your request.
Credit Counseling
Good nonprofit credit counselors can help you establish, and stick to, a budget. If your credit problems are due to money mismanagement, you won't be able to rebuild your credit until you address the behavior that cause you to overspend. By talking with a counselor, you'll develop a better understanding of your finances and how you spend money, and can develop a money management system that works for you.
Department Store and Secured Credit Cards
In order to rebuild credit, you need to use credit. Department store and secured credit cards are often easy to get. Make a few purchases with the cards, keeping your balance under 30 percent of your credit limit, and then pay your balances off each month. Eventually, you'll develop a good payment history, which will improve your credit score.
Working With Creditors
If you have a track record of of making late payments, but your accounts are still open, make your payments on time, every month, for the next six months. Then send a goodwill request to those creditors asking them to remove the late payments from your credit record. In situations where your creditor has charged off an old debt, but you now have the money to pay it, send a letter offering to pay the debt if the creditor removes the account entirely from your reports.
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