Most banks and financial institutions refer to the process of re-acquiring good credit after entering into a condition of bad credit as “rebuilding credit.”
No matter how bad your credit rating has become, it is still possible to rebuild your credit until you are once again rated as a trustworthy borrower with “good credit” by following these steps:
Obtain a copy of your credit report – These can be obtained free online. It is essential that you first know exactly where you stand before you can begin rebuilding your credit.
Make a Debt Repayment Plan- Whether through careful management of your budget, or by the use of a debt consolidation loan, the next step is to begin repaying all of your debts as quickly as possible.
Begin Building Good Credit – You can apply for credit cards from major card issuers or from local businesses, local banks, or credit unions. If possible, you can also apply for loans and/or credit cards with a cosigner that has good credit. The more you can borrow and pay back in a timely manner, the faster you will begin to rebuild your credit.
There is no way to overcome bad credit in a single day. The process of rebuilding credit takes time and patience. Be sure to regularly review your current credit rating, and always make your payments on time.