You aren’t the only one who feels like you’ll never have good credit.  It seems like only yesterday when you qualified for anything you wanted.  What happened?  How did it happen so quickly?

Millions of Americans feel just the way you do.  Your credit card and other bills are piling up and you can’t seem to even qualify for a new car, let alone your dream home.  Follow these proven steps to rebuild your credit.

1. Stick to your budget.  Budgeting is a fundamental element in rebuilding your credit.  Budgeting will keep you from spending more money than you make.  Carefully look at your income and what you spending your money on.  Make sure you are paying your creditors before going on that mini shopping spree.  Review your budget daily, if needed.  As you do this, you will be able to track exactly where your money is going and you’ll be able to cut back on unnecessary spending.

2. Rank.  Make a list of all the creditors you owe money to.  Put them in order of highest interest rate.  Be disciplined to pay off those highest interest rate accounts first.  You’ll be surprised how much money that actually saves you because you won’t be paying as much in fees and interest.

3. Cut your balance.  First of all, try not to carry a balance on any of your credit cards.  If you have to carry a balance, especially while you are working to pay it off, keep it less than 40% of your limit.  For instance, if your limit is $2500, your balance should be no more than $1000.  This alone will cut back on your dependence on the credit card.

4. Check your report.  Make sure you check your credit report at least once a year.  Financial experts recommend that you check it every three months.  As you do this, you will be able to correct mistakes much faster.  You will also be able to watch out for identity theft this way.  The best way to rebuild your credit is to be informed and also stay informed.

5. Get help.  If you feel the burden of financial stress, seek the help of a financial planner or credit counselor.  Don’t wait until you are late on your payments and you have stacks and stacks of unpaid bills.  These professionals will be able to help you get a hold of your finances long before the creditors know there is a problem.

It will take patience, diligence and a great deal of will power to rebuild your credit.  It takes a lot longer to rebuild your credit than it takes to hurt it.  Make sure you plan ahead and stick to the plan.  This will help you steer clear of additional unnecessary debt.  Stay focused and you will see the improvement; in your credit score and in your spending habits.

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Tags: credit card, credit report, credit score, rebuild credit

This entry was posted on Monday, July 28th, 2008 at 11:04 am and is filed under Credit Card Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.