Repairing & Restoring Your Credit

You can build a strong credit history if you use credit wisely over a period of time. It’s important not to wait until you need to borrow to think about whether you’ll qualify.

Get a credit card. The easiest first step in building a good credit reputation is usually obtaining and using a credit card on a regular basis. If you don’t already have a credit card, you can apply for one that’s issued by the bank or credit union where you have an account.

If your application is rejected, you can apply for a retail store card or a gasoline card. While the ways you can use these cards is more limited, using them wisely can help you establish your creditworthiness.

As a last resort, you may consider what’s known as a secured credit card, which is typically linked to a savings account you maintain with the issuer. But be careful. Some of these cards have high fees and using one may not always help you get a regular card.

Make payments on time. It’s essential to make at least the minimum payment on your credit card bill by the date it is due. In addition to the late fee you’ll
be charged each time you miss the deadline, you put your credit reputation at risk if you pay more than 60 days late at least three times.

Keep balances well below credit limit. Lenders evaluate how much debt you have in relation to the amount of credit available to you on your cards or from other credit sources. The smaller the proportion of credit you’re using in relation to what you could use, the stronger a candidate you are for more credit.

Contributions from the book Credit & Borrowing in this press release are used with permission from Light Bulb Press.