Five Ideas To Improve Your Credit Score Starting From Zero
Your credit report is what financial institutions use to get a window into your past and your present financial situations. If you are currently suffering through bad credit rating due to a job loss or any other unfortunate situations, there are ways you can re-establish your credit worthiness and start over.
Before you can start fixing your credit score, the first step is to get a copy of your credit report. Once you receive your report, make sure that you examine it from top to bottom for possible errors. Checking your report may reveal some accounts that have been paid off already, identity fraud, or even double listing of the same accounts. When dealing with erroneous charges on you report, it is more effective if you seek the advice of a credit attorney.
The second step in the process of improving your credit bureau involves putting some positive items on your report. Your credit report may be clean as a whistle but without some positive accounts, you will not be able to generate a credit rating.
One solution to establishing new credit is obtaining a secured card. These companies allow you to put a deposit into a savings account and they will give you a credit card with the same amount as your initial deposit. Characteristics of reputable secured card companies are: they offer a little 25% higher limit on your deposit, they increase your limit every 3 months, they report to all 3 credit bureaus, and they do not disclose your credit cards as a secured to the credit reporting agencies.
The third step to increasing your credit rating is having a spouse or close family member with a positive credit rating add you on as a co-borrower. This technique although very effective is a little risky because if your sponsor stops paying their account on time, it will also affect your credit rating. There have also been rumors that the credit bureaus may stop reporting co-borrowers but for now it is still effective.
The fourth and final step to raising your credit score is making your payments on time. When creditors are looking at your credit report, they tend to look at your previous six months of payments. Your current payment history will give borrowers a picture of your present financial standing.
The credit bureaus will also continuously raise your credit score a few points for every month of timely payments. If you can afford to continuously make 2 years of on time payments, you will have succeeded in improving your worthiness with the financial institutions.
Getting your credit worthiness back is important in taking control of your finances. The road back must include getting a copy of your report, establishing new accounts, and adding discipline to your bill payments. Once you have completed this process, you may want to consider adding a fifth step; adding identity protection to secure your new found credit worthiness.
For more detailed information on how to raise credit score you can visit how to improve your credit score.