How Can I Go About Rebuilding My Credit and Raise My Score?

Rebuilding your credit after dealing with a setback such as bankruptcy and foreclosure can be a daunting task. Bad credit makes establishing a positive credit history harder, but you have many avenues of adding new tradelines to your account. You can also use several credit repair techniques to improve the score you currently have.

Instructions

1

Go to annualcreditreport.com and request a copy of your free annual credit report, if you have not requested a report this year.

2

Go down your list of active accounts and call your credit card companies of your positive accounts. Request a credit limit increase to raise your overall access to credit. If you have balances, credit limit increases can decrease your utilization and increase your credit score.

3

Pay down your credit card balances. Credit card utilization is the percentage of revolving credit you are using versus the total amount of credit you can use. The lower the percentage the better, as high utilization can greatly effect your credit score.

4

Apply for credit cards geared towards bad credit and credit rebuilding. Secured credit card accounts allow you to put some money in a savings account as collateral. You receive a card with a limit equal to the secured account. Some credit card companies offer cards with high annual fees or interest rates to offset the bad credit risk. Store cards are an option for rebuilding credit, as their credit requirements tend to be lower than regular credit cards.

5

Pay off collection accounts on your credit report, if possible. A collection agency can update the collection account on your report, making it appear to be a recent collection account due to the activity. This practice can decrease your credit score. If a lender, such as a mortgage lender, is manually reviewing your credit report he may put choose to decline the application due to open collection accounts.

Contact the collection agency using the contact information provided on your credit report. Request a payment plan, settlement or pay the debt off in full. Some collection agencies will delete your collection account from the credit report in exchange for payment on the account.