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How To Rebuild Credit

Sep 13, 2008
Having good credit is very important today because you need good credit to buy a house, a car or even to get a decent job. With bad credit, you will get high interest rates on your loans and some employers will reject your application. You need to know how to rebuild credit so that you can borrow cheap and repair your credit score yourself instead of having to pay credit repair companies to do it for you.

Understanding what your credit report composes of is the first step in knowing how to rebuild credit. Credit bureaus report certain items on your credit reports and use various factors to calculate your credit score. To start rebuilding your credit, examine your credit report and see if there is any negative remark on it. If there is then you must work hard to correct it. Some negative marks can be corrected fast while others take longer so be patient.

There are many reasons why someone's credit might be bad. Late payment is a big reason for bad credit. If someone consistently pays late then creditors can report it to the credit bureaus and that person will have credit report that shows late payments. Too many late payments will lower your credit score. So, if you have late payments on your credit report and they are true, then try pay them on time. If they are not true and you never paid anything late, then contact the credit bureaus and dispute.

Another important fact to know about how to rebuild credit is that the credit bureaus care more about the debt to credit line ratio than the actual amount of debt itself. If someone has lots of debts, that person can still have good credit if he or she also has large credit lines. A small amount of debt and a small credit line can lead to a low debt to credit line ratio which is worse.

There are some credit problems that are larger than others. A person who went through a foreclosure, a bankruptcy, a repossession, for example, can have very bad credit and disparately needs to learn how to rebuild credit. While it is harder to rebuild credit from such credit-destroying events, it is not impossible. However, it takes efforts and a longer time to rebuild credit in these circumstances.

After foreclosure or bankruptcy, there are many strategies of how to rebuild credit that you can use. Most of them involved showing the credit bureaus that you can now be responsible about paying your debts on time without doubt. One of the strategies of how to rebuild credit is to find a secured credit card and start using it and paying it off regularly.
About the Author
Learning how to rebuild credit can be difficult at first because there are not many free places to learn the best strategies you should be following. Luckily, the Repair Credit Score resource website is just what you need, with many free tools and information to get your good credit restored in no time!
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