Rebuilding Your Credit: Path to Cheaper Borrowing

Rebuilding your credit can be a great technique to take control of your future. Face it - to live in today’s world, you need access to credit, and you need it cheap. Unfortunately, lots of people have ruined their credit because of hard times or bad decisions when they were young. There’s still time, however, to put things right, no matter how far in the hole you are.

First, you should pay off the debts you have now. Begin making regular payments on all your debts, no matter how small - this will often keep the creditors from reporting you as delinquent, and you can usually work something out with them. At this point, they’ve probably written you off anyway, so they have nothing to lose. Don’t sacrifice to the point that you’re living in a hovel with fleas, but do tighten your belt.

Second, you should get new credit, and make sure you’re making small monthly payments. Don’t go wild - you just need to keep a few hundred dollars in debt outstanding each month. Pay the fees, and don’t spend any more money. You’ll gradually pay it off, and build your credit in the process.

Third, if you have any old debts you never paid off, repay them on the condition that it gets reported to the credit agencies. This will please your old creditors and make you look good to anyone considering you in the future - they’ll at least see that you’re making an effort.

Finally, don’t do the things that got you that badly into debt in the first place. No payday loans, no heavy borrowing - live within your means, and stay there.