How to Improve Your Credit Score by Rebuilding Your Credit

If you want to improve your credit score, you should avoid defaulting on your payments, making delayed payments and going bankrupt. These are the critical factors that will ruin your credit score. A low credit score will make it harder for you to access loans. If you finally succeed on getting bad credit loans, you will end up paying a high interest rate for the simple reason that lenders will consider you high risk.

The good news is that everyone can work on their credit score and improve it. Although this process takes time and effort on your part, you will succeed in raising the score until such a time that you can access loans with low interest rates at will. The following are the main things you should do if you are seeking to improve your credit rating.

1. The first thing that will get you back on track is to open a different credit card account if your other accounts have been closed due to bankruptcy or delinquency. This is the account that you will be using to seek credit and work on your score. In case you don’t qualify for a normal account, look for a bank that provides secured cards.
2. Now that you have a credit card account, you should start making small purchases which you can pay back with ease every month. Note that 35% of your credit score is pegged on how regularly and promptly you are able to make payments. When you regularly pay for your purchases, you will have a positive credit history which will boost you even further. Furthermore, small purchases ensure that your debt-to-credit limit ratio remains low which is an added bonus.
3. If you continue making small purchases and paying on time, very soon your credit history will be looking good. At this time, you can apply for a small loan. This will be very easy to access especially if you operate a mixture of accounts. Getting an installment loan and paying for your purchases on time will go a long way to boosting your credit score.
4. To make sure that all your financial activities appear on your credit report, you should contact TransUnion, Equifax and Experian and order the report. This can easily be done through the official website AnnualCreditReport.com. This way, you will be able to confirm that indeed your efforts have not been in vain. After all, it would be fruitless to work on improving your credit score if the credit report does not reflect your efforts. If you notice a discrepancy, contact your credit card company and ask them to report your account activity.

It is worth noting that any other website that you use to obtain your credit reports will most likely charge you or require you to subscribe for paid membership. This is why you should go to the official website where you are entitled to a free report once a year. If you would like to access loans when your credit score is not yet looking good, you can always apply for bad credit loans although you will end up paying a high interest rate. Over time, your credit score will improve and you can then go for low interest loans.