Mike Torres asked:




If you have a bad credit history then there are some actions you can take to recover from a poor credit rating. At this point, I don’t recommend a payday loan or any sort of unsecured loan. Although it’s likely you will be rejected for most anyway, the last thing you want to do is get into more debt. People with bad credit need to plan for the long term and not just the short term.

Pay Bills On Time

The first step to fixing poor credit history is to always pay your bills on time from now on. This will show that you are reliable and can meet commitments. This will get you on track to a good credit rating.

Stop Using Credit Cards

Credit cards are the largest source of bad credit ratings. You must take immediate action and stop using your credit cards. Tear them up, freeze them or give them to a loved one. Anything that stops you from making those impulse purchases. And you should definitely NOT be paying your bills with a credit card!

Credit debt consolidation is one way to cancel your credit cards as the balance is put into a loan instead.

Take a Second Job

Although its hard work, you simply need to be earning more if you want to fix your credit particularly if you have large monthly loan repayments to adhere to. The extra income will help you to catch up on bills and of course contribute a small amount to a savings account for future or emergency use.

Get a Small Loan

This might sound like crazy advice to give to someone with bad credit, however if you have a family member co sign with you on a very small personal loan (say $2000) and you make repayments on time, this will without doubt fix your credit rating alot. You will lose money in the short term but long term you will be better off.

Christopher

gds_ny2003 asked:


I’m looking to repair my poor credit rating. I owe 10k+ to various creditors. I’m married, we both have a decent paying jobs. My spouse has credit problems as well. Here are my concerns:
1. Are there any immediate steps that I should take to get started?

2. What is considered a “good” score to have when buying a house?

3. What short term steps (6 months to 1 year period) can I take to bring my rating up to a “moderate” level?

4. What long-term steps can I take to make for the future so that I do not fall back to where I am now?

5. I know that some credit counselling services are predatory in nature, and actually put people into more trouble than they had to begin with. Are there any reputable credit counselling services out there (preferably non-profit)?

Alice

Molly Wider asked:




Something that many individuals with bad credit have in common is that they do nothing about it. They accept that they have bad credit and live with the consequences. Many don’t realize that it is actually not that difficult to fix a credit score. It does take patience as it can take a year, or many years depending on how bad your score is, but it is possible. The key is taking action and being consistent. The following are steps that you can take to improve your credit rating.

- Request your credit report. In Canada this means contacting Equifax Canada and TransUnion Canada. In the US this means contacting Experian, TransUnion, and Equifax. Many people are unaware that a poor credit rating could be due to clerical errors. Typos and duplicate entries on a credit report are not uncommon. Once you have your reports, review them closely to ensure that there are no errors. If there are errors, dispute the charges with the reporting agency and you could be back to an acceptable credit rating sooner than you think.

If you have established that your credit report is accurate, and would like to improve it, the following should be your next steps:

- Pay all of your bills on time. If you can’t pay the bills on time, call the company(s) you will be late in paying and let them know when you will be paying. Some companies will note these calls in your customer file and it may prevent them from reporting a non-payment. This will not always work, but it’s worth a try.

- Don’t cut up your credit cards. Many think that if they don’t use credit for a while their score will be fixed and this is not the case. You must use credit to gain credit. Reduce the amount of available credit on each card and reduce the number of cards you carry. Don’t just cut up a card, but call to have the account closed. Call or write to your credit card companies and ask them to reduce your interest rate. Paying a yearly fee for a lower interest rate on a card on which you carry a balance may be well worth it in the end. Again, if at all possible, be sure to pay your bills on time.

- If you have no cards, try to obtain a secured loan, or a secured credit card to re-establish your credit. Asking a friend or family member to co-sign on a loan or credit card is another method, but beware, if you don’t pay this debt, you may lose a lot more than a good credit score, so this should be a last resort.

Fixing your credit score is not impossible, but it does take patience, persistence and commitment. Following these steps should help you to improve your credit rating.

Nicole