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Rebuilding Credit

A 10-part Credit Repair Guide

<< Part 9 — Part 10 — Part 1 >>

rebuilding creditHow to Re-build your Credit
The final step of credit repair is re-building your credit.  After you've disputed items on your credit report and (hopefully) they have been removed, it's time to establish new credit.

Even if your credit score only improves by a few points, there are ways to re-build credit.  For example, if you still have a 605 credit score, you may not get approved for the unsecured credit card of your choice.  There's still no harm in applying for unsecured credit.  Store cards will be easier to retrieve than credit cards from your bank.  However, if you do get rejected, there is still hope.

Secured Credit Cards
Secured credit cards are very helpful in allowing consumers to get a good credit score when re-building credit.  In order to get your hands on a secured credit card, you first submit a deposit close to or equal to your credit line.  If you submit a $200.00 deposit, you will have a credit line of $200.00.
 
What's the difference between a secured credit card and a debit card?  Though they may seem similar in concept, using a debit card won't help you re-build your credit.  Lenders and creditors need to know you are trustworthy with lines of credit.  Therefore, if you make charges to your secured credit card on a regular basis and pay off all your balances in full, you have gained creditworthiness.  After a certain period of time (i.e.:  2 years), if the creditor deems you trustworthy with that line of credit, you will get back your deposit.
 
Trade Lines
All credit accounts on your report are referred to as "trade lines."  By adding new trade lines to your credit report, you can increase the amount of overall credit you have access to, which will in turn improve your debt-to-income ratio.
 
An easy way to add trade lines is to be added as an authorized user on a well-established credit account.  You won't need to use the credit card.  The process is also known as "piggybacking."  There are certain companies that charge high fees for piggybacking on random users' accounts.  If possible, ask a friend or family member with good credit if you can be added as an authorized user.  In this way, you'll be more acquainted with the primary user's financial habits.
 
Need Help Re-building your Credit?
If you sign up for Sky Blue Credit Repair, your credit counselor will help you establish new credit in the form of secured credit cards, unsecured credit cards, and tradelines.  10% of your FICO score consists of "new credit."  By getting negative items removed from your report and creating new credit, you're taking care of all aspects of the credit repair process.  Before you know it, you'll be on the fast track to re-vitalizing your credit!  Get started today!
 

steps to rebuild credit
 
 

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