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Bad credit history isn't the end of the world. There are a lot of financial woes that can follow you around for the next seven years. Things like bankruptcy, foreclosure, repossessions and even late payments will show up on your credit report and be a little difficult to have them removed. However, with the right steps, you can actually straighten up your credit history to start improving your score.
You don't need to hire a company to help you. It's completely possible to repair your credit completely on your own. However, you must be patient. Perseverance is a key ingredient to improving your credit score. Just make sure you understand that it won't happen overnight. Once you implement the different options, it will take time to get back to the credit reporting agencies. Further, you will need to show that this is a long-term improvement and not just a fluke.
Your credit rating can be improved by following some of these options:
Get a secured credit card
To build credit, you need credit. A secured credit card means that you have to put a security deposit down on the card with the financial institution. The credit limit of the card is set by whatever you deposit. The good news is that this credit card will appear on your credit report as a standard credit card. You can use it as a standard card and start to build good credit history. Particularly if you have really poor credit, it will allow you to establish credit when other lenders have rejected you for a card.
Sign up for a Registered Retirement Savings Loan (RRSP)
This will help you maximize your contributions to a retirement plan. There is a really low interest rate attached to it as well. This will help you repay the loan within the first year. Because you will pay the loan so quickly, it will have an almost immediate impact on your credit history in a positive way.
Do not show desperation
Lots of companies will offer to fix your credit history and help you to increase your credit score. Many of these companies can actually hurt your credit even more because they have you taking the wrong steps. Don't be a victim to these companies. The process takes time. Anyone who tells you otherwise is not being truthful with you. It is not possible to alter your credit history legally in such a quick manner.
Limit your credit cards
You may not realize it, but even if you pay off your credit cards on a regular basis, too many can hurt your credit history. The reason is because you have the potential to get yourself into a lot of debt. If you have 4 cards and each of them has a $10,000 credit limit, the thought process is that you are sitting on the potential of being $40,000 in debt. Even if your balances are at zero, it's the potential that is hurting you. Close up some of the open credit you have and it will help out your credit score.
Speak with a credit counselor
Credit counselors can give you some great advice on how to manage your money more effectively. You may learn how to set up a budget better that will help you reduce spending in some areas and free up more money that can be applied to your credit card debt. Another way that a counselor can help is to give you ideas about how not to damage your credit rating again. This advice can be invaluable to helping you get out of debt and ensuring you never get back there again.
Do not apply for multiple credit lines
Too many inquiries in too short of a time frame can damage your credit rating. Every time a company looks at your credit, it can reduce your score. It can appear as though you are searching for credit opportunities or trying to gain a bunch of different kinds of credit. The moment you stop making so many credit inquiries, your credit rating will begin to increase.
Your credit score is going to get better if you pay attention to even some of these options. The more you learn about credit and what impacts your credit score, the better off you will be. If you plan on getting out of debt, you need to start taking action now. Even if a bankruptcy or foreclosure is sitting on your history, you don't have to wait 7 years to start improving your score.