rebuild credit score

11 Ways to Help Rebuild Your Credit Score

Your credit can decrease but there are ways to help bring it back up. These methods will help your rebuild credit score for the long haul.

Low credit scores can happen to the best of us. When you don’t have good credit, it’s tough to make significant purchases, lease an apartment, or get a credit card. 

Is there any way to escape? With some work, you can rebuild your credit score! Sometimes disputing an inaccurate charge on your report can help, but with a low credit score, you’ll need to try some other things to get that score up. 

rebuild credit score
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Follow these eleven ways to boost your credit score!

1. Understand the Numbers

If you haven’t checked your credit score lately, it’s a good idea to get a realistic picture of where you are. Before you can fix a low credit number, make sure you understand where you are and where to go for improvement. Here’s an easy way to check your credit score

  • Anything below a score of 579 needs the most attention
  • Scores between 580 – 669 are “fair” according to Experian
  • A range of 670 – 739 is considered “good”

The higher your credit score, the better your options for car loans, mortgage financing, and other financial needs. 

If your credit score is above 740, that’s “excellent!” Keep doing what you’re doing. 

2. Stay Informed About Your Credit Score

Ignoring it won’t make it go away! If you’re struggling to pay off credit cards or secure a loan for a new car, your credit score probably needs to improve. 

You can request a free copy of your credit report every year from each of the three major credit reporting agencies: Experian, TransUnion and Equifax. While your credit score should be similar across all three reporting agencies, it can vary slightly. It’s a good idea to review all three reports to get a complete picture of your credit score. 

Track improvements and review each report for accuracy. Sometimes a mistake on one report could skew your credit rating. 

3. Address Late Payments

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Missing payment deadlines has a negative impact on your credit score. Commit to paying every bill on time. If you have a credit card or car payment with a single late payment, reach out to that creditor and see if they’ll forgive a one-time lapse in your on-time payment history. 

4. Don’t Max Out Credit Cards

It’s tough to pay down a large credit card balance. Commit to using only a small percentage of your available credit limit on a card, then maintain your payments to keep yourself below that percentage

5. Pay Off Credit Card Balances Every Month

Avoid using credit cards as “extra” money. There are plenty of credit benefits and mileage or points perks to using credit cards as a way to pay for everyday items. However, don’t use them to the point of exceeding what you can pay off each month. Start each month with a zero balance on your credit cards. 

6. Use a Secured Credit Card

To get into the habit of spending only what you can afford while using a credit card, get a secured card. These cards require you to provide a deposit that serves as your credit limit for that card. It’s an excellent way to build your credit while giving yourself a spending limit. 

7. Avoid New Credit Cards

If you’re struggling to pay down your current credit cards and other debt, don’t open a new credit card account. While having multiple cards can boost your credit score when used responsibly, if you’re already digging out from under too much debt, a new card can negatively affect your credit score. 

rebuild credit score
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Pay off your current balances before considering a new line of credit. Choosing a line of credit like one offered by Echo Credit (link) can be an alternative to another credit card. 

8. Ask to Be an Authorized User

As mentioned, managing multiple lines of credit responsibly can enhance your credit score. An excellent way to do that without adding another credit card to your credit report is by asking a friend or family member to add you as an authorized user. 

Choose someone with an excellent credit history. When you’re an authorized user, you don’t need to use their credit cards. However, their positive credit history can help offset some of your poor credit history to improve your overall credit score. 

9. Prioritize Collections

If any past due balances have moved to a collections agency, address those right away. In many cases, it can be best not to deal with the collections agency. Go directly to your creditors to arrange a payment plan that resolves the past due amount in full. 

10. Live a Cash-Only Lifestyle

Prioritizing your credit score means reducing your credit card spending until your balances are in order, and your score improves. Changing your spending habits can help get your credit score back on track. 

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Set your monthly budget to include steady payments to your creditors. Reduce your spending to only the essentials. Avoid significant purchases until your credit score is back on track. 

11. Be Patient

It can feel like your credit score took a dive overnight! Be patient while rebuilding credit. It can take a few months to a year or longer to correct credit mistakes and improve your score. During that time, you’ll develop better spending habits and set yourself up for maintaining a better credit score!

Stay Consistent to Rebuild Credit Score

Any kind of positive change requires time, patience, and consistency. To rebuild your credit score, you’ll need to face mistakes, reach out to creditors and financial institutions, and make changes to your spending habits. 

Maintaining good credit is a lifetime commitment! However, you’ll find that a good credit score provides many financial benefits when it comes to home or auto loans, securing better insurance rates, and living the life you want to afford.

When considering your next credit options, Echo Credit offers a line of credit that could suit your spending needs. Click here to apply.

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