How You Can Begin to Repair Your Credit

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Wallet-908569_1920The heartbeat of our financial life is our credit score. When that number falters, we experience financial cardiac arrest. When your credit score is bad it can impact your ability to borrow money. Your credit rating drops if you have unpaid bills or if you pay your bills late. Here are some ways you can begin to repair your credit so that it becomes easier for you to borrow in the future. 

#1 Consider Buying a Home

If your credit score is poor, you won’t qualify for a standard mortgage but you may qualify for an FHA loan as these are guaranteed by the federal government. This is one way that helps you to rebuild your credit. 

#2 Adhere to a Commitment

This is the first step in rebuilding your credit score. This will require you to make some major changes and then you are going to have to stick to them. From here on in you’ll only be buying things you absolutely need. 

#3 Make Your Mortgage Payments

If you have a mortgage, even if the rest of your credit is not looking healthy, continue to make these payments on time and it will help to slowly restore your credit score. 

#4 Work With Your Creditors

You should make sure to work with your creditors so that you do not get further into debt and damage your credit even more. Begin to work towards paying off your debt by asking the credit card company to reduce your interest rate or through debt negotiation. 

#5 Bankruptcy

While this should be a last resort, there are times where it should be considered because otherwise you will never repair your credit. A bankruptcy will affect your credit report for ten years, so before choosing this option weigh all the pros and cons. 

#6 Don’t Use Credit Cards

Avoid using credit cards at all. Get rid of them and begin to start making payments that are at least double the required payment, because unless you do you’ll never make a dent on the actual amount owed and will continue to simply pay the interest.