How To Rebuild Your Credit Rating

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If you’ve had trouble paying your bills (who hasn’t, in this terrible economy?) and you have dings on your credit, you may think that it will be impossible to rebuild your credit rating. Nothing could be farther from the truth. Bad marks on your credit lose their impact on your credit score as time passes. Even a bankruptcy will lose much of its impact, although it will still remain on credit report, five years after the fact. Bad marks for late payments lose their impact over a much shorter period of time; perhaps  six months to a year after the fact, assuming you make all other payments on time.

So how do you rebuild your credit rating? The following four actions will help you to improve your credit score over a period of time. 


1: Pay on time.

If your credit problems are the result of mere dings on your credit report due to late payments and you’ve been able to catch up, then continuing to pay on time will all but erase the effects of those late payments on your  credit score. The "ding" will remain on your credit report for up to seven years, but you can ask your creditor to remove the negative marks from your report.  Many creditors, particularly merchants who offer store credit accounts, will usually remove the information when asked because they are interested in retaining your business.

2: Get a secured card to re-establish credit.

This is especially important if you’ve gone through a bankruptcy or a credit counseling program and your old credit lines have been closed. You need to establish some sort of positive history so that your credit score will improve. One of the best ways to do it is through a secured credit card, where you balance is secured by a deposit held in a special savings account. These cards are easy to get so long as you have the money to deposit to secure your credit line. Some secured credit cards, like the one available from Public Savings Bank, offer competitive interest rates of 11%. If you pay off your balance in full on most months and rarely carry a balance, you won’t need to worry about interest charges at all.

3: Use credit wisely.

Going forward, you want to establish good credit habits. Those include keeping your credit card balances low enough that you’re able to, for the most part, pay them off in full at the end of each month and having at most two credit cards to prevent you from borrowing too much.

4: Review your credit report regularly for accuracy.

You can get your credit report for free at If you find incorrect, or outdated information on your credit report, you can write to the the credit bureau to get it removed. Information is considered outdated if it is negative and it remains on your credit report longer than seven years. By law, if you contest any information in your credit report, the credit bureau must investigate it and if it is found to be incorrect, or outdated,  must promptly remove it.

Having a low credit score or bad credit is never a permanent situation. Once whatever financial trouble has come your way is past, even if that trouble has required that you go bankrupt, you can rebuild your credit rating over time.

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3 Responses to “How To Rebuild Your Credit Rating”

  1. This is so cool I super love it, many people would love to read this article they could relate to it. Because in this time credit card is part of people’s life. Though credit repair business help in this kind of business.

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