As you probably already know, your credit score and credit report are both important. Your credit history serves as a way for lenders to make decisions about you, and a poor credit score could mean difficult getting a home loan. You might even have trouble getting a good rate on a credit card. The good news is that your bad credit now doesn't doom you to an eternal financial hell. You can rebuild your credit.
Rebuilding Your Credit
Right now, you may not qualify for the best credit card offers in Canada, and you probably can't get the best interest rate on a home or car loan, but you can get to the point. It takes some hard work and determination, though. Here are some of the things you can do to rebuild your credit:
- Pay down debt: One of the best things you can do to improve your credit score is to pay down your debt. When you have a lower amount of debt, your credit score improves. You can do a lot for your credit by getting rid of most of your debt.
- Pay on time: Your payment history is another important part of your credit score. Make sure that you make credit payments and other payments on time. This will reflect well on you and help you appear more responsible.
- Start using credit again: In order to show that you have a responsible attitude toward credit, you will need to use it wisely. You can use credit cards to help you rebuild your credit, since they represent one of the fastest ways to create a good history. However, you will have to settle for a card with a higher interest rate, and you may even need to get a secured credit card to start. Use credit wisely, and you can rebuild your credit.
Remember, though, that it can take a while to rebuild your credit, especially if a bankruptcy is involved. It might take two or three years to see a solid improvement, and the bankruptcy will remain on your credit report for up to 10 years. However, even with a bankruptcy on your credit report, is possible to show improvement -- as long as you take a planned approach to using credit wisely.
Image source: sxc.hu via Wikimedia Commons
This post was included in the October 31, 2010, Carnival of Wealth at Personal Dividends.
Obtaining the secure credit card is always a good move. There are some loans that you can get from the bank that you prepay so to speak. You deposit say $1,000 into an account. They issue you $1,000 loan, report to the credit bureaus for you. Forget what these are called. You know what im talking about?