If you are dealing with a poor credit situation you may be asking yourself whether you can rebuild your credit or achieve a good credit score. The short answer is that you can rebuild your credit.
Just remember that your credit is like your health. You didn’t destroy it in a day and you can’t fix it in one. A lifestyle change of some kind is in order.
How to Achieve Good Credit Score? Step 1-Create Credit
Sometimes the problem is that you just don’t have credit. In some cases this is worse than having bad credit because you don’t even have a history to explain or work with. Some people just prefer to pay with cash and if they don’t have the cash, they don’t buy it. This works out well unless you get into a bind. Then you need to use your credit for something and it isn’t there to use. You can still use the cash method. You just need to change how you use it.
When you want to buy something and you have the cash for it, apply for credit instead. Keep the cash on hand and make your payments out of it. This is especially helpful to your credit and your finances in general when you take advantage of no interest offers. For example, some places offer no interest for a set amount of days. Make regular payments on the line of credit and pay it off before the time is up. You will have built up your credit but you won’t have paid anymore than you would have paid if you had used cash. This method works great in building up your credit and to finally achieve a good credit score.
Step 2-Pay Off Debts
Paying off old debts is as important as opening a line of credit. If you can do them both at the same time you will be in even better shape. Make small payments on all of your debts in order to show that you are being active in trying to pay off your debts. Pay off your smallest debts first. This will give you a sense of accomplishment and get rid of debts on your credit report at the same time. Works well in building a good credit score if you ask me!
There are plenty of places who are willing to take a fraction of the debt owed as long as they get something. Make contact with your creditors. Offer them what you can and see how they respond. In some cases you may be able to pay off your debt for pennies on the dollar. Offer a very low amount and bargain with your creditors from there. At the very least you may be able to get some of the interest dropped from your bill. You might even find that they are willing to work with you beyond what you ever expected.
Step 4- Charge Offs
If you have looked at your credit report you have probably seen the term “charge off”. This happens when a company gives up on collecting the debt. They have written it off as a loss and won’t pursue you, but it still reflects on your credit. Contact the company to learn what amount it will take to have this removed from your report. Work towards rectifying the situation and it will surely help with building up your credit and eventually helping you with good credit score.
You can rebuild your credit, but it’s going to take some effort. You may have to limit what you spend on entertainment and use it on your old debts instead. Word hard on your credit and you will surely reap the reward-in this case, achieving a good credit score!