How to Rebuild Damaged Credit

If you have had credit problems in the past, you may have a low credit score due to your damaged credit. Having damaged credit is not forever. In fact, you can actually take action and begin rebuilding your damaged credit on your own. Rebuilding your credit means that you are showing creditors that you can responsibly manage your money and are worthy of being issued credit. Rebuilding your credit can be a lengthy process, but it will work if you stick with it.

Instructions

1

Get a copy of your credit report to look for anything that is inaccurate. You can do this by contacting the credit bureaus, Experian, Equifax and TransUnion, directly or by using an online service such as TrueCredit to get all three at once. It is important to get all three because they may not all have the same information. If you find something inaccurate, use the dispute option listed on the credit report.

2

Pay down credit cards that have high balances. When you have credit cards that are close to the limit, it lowers your credit score. By carrying a low balance, you show a low credit utilization, which boosts your credit score.

3

Leave all of your credit card accounts open. The longer your credit history appears on your credit report, the higher your credit score. Closing older credit card accounts, even if you do not use them, can actually lower your credit score.

4

Get a secured credit card if you want to start showing new positive credit history. Secured credit cards require you to place money in a savings account that is used to fund the credit card. The Find Secured Cards website (see Resources) has a list of current secured credit cards that are available.