How to rebuild your credit quickly?
It can happen to each of us to be the victim of a job loss, a divorce, a health problem… And since misfortune never comes alone, this type of unforeseen event in life often causes financial difficulties and therefore credit problems.
So how to restore credit quickly or at least effectively? 10-Trucs offers you below 10 simple and effective tips to rebuild your credit!
Tips for restoring your credit:
1. Have a stable job for good credit
This may sound like a simplistic suggestion, but changing jobs too often will hurt you when it comes time to apply for credit.
Indeed, a potential lender may think that if you change jobs too often that you are unstable and therefore unreliable or even incompetent and easily dismissed.
Which inevitably puts you in a fragile situation in the event that you have to repay a loan or any credit.
2. Stay at the same address for a long time
Constantly moving can, like changing jobs, often denote a form of instability. When applying for credit, you are generally asked to provide your addresses for the last 5 years.
If you’re a tenant, it can also scare off a potential lender into thinking you’re moving frequently because you’re not paying your rent.
Staying in one place for a long time will allow your lender to see that you are able to make regular monthly payments.
3. Pay more than the minimum due on your credit card
If you already have a credit card with a balance owing, it is important to make a prompt payment, before you are late.
In addition, when possible, pay more than the minimum amount due to demonstrate to your lender that you have financial leeway.
You should never be late in payment, regardless of the type of credit. A collection account can hurt your credit rating for years!
4. Rebuild your credit with a secure credit card
If you have had serious credit problems in the past, a good tip to rebuild your credit quickly is to use a secured credit card.
This type of credit card is really ideal for rebuilding your credit effectively. In fact, you use it like a conventional card, but with the difference that it is protected in the event of an overdraft.
So you are guaranteed never to miss a monthly payment since you added an amount as security when you subscribed.
Secured credit cards can therefore be a good solution to help people with an unfavorable credit score!
5. Deposit money in your bank account
It is important to have a savings account with a certain amount of money inside of it. Indeed, this bank account will be effective in demonstrating to a potential lender your financial means in addition to being able to use this money in the event of unforeseen circumstances.
Have your salary paid by bank transfer to show your financial institution that you have a regular income.
Make sure you keep a certain amount of money in your account. Having savings shows that you are able to meet your financial obligations.
6. Apply for a small loan
Ask your financial institution to lend you a small amount that you can repay in a short period of time. A loan repayable over 12 months, for example, is ideal to help restore your credit.
Use the amount borrowed as collateral to demonstrate to your financial institution that you are able to make regular payments.
7. Never exceed your credit limit
It’s hard to rebuild your credit if you spend your time going over your credit limit!
So avoid overloading your credit cards or lines of credit in order to prove to a potential lender that you are able to meet your obligations without having to instantly resort to credit.
Because do not forget to get out of debt is not easy, especially if the debts are very numerous. Come and read our tips here: How to get out of debt?
8. Find a surety to restore his credit
If you are lucky enough to have relatives or friends who are very well off financially, ask them to guarantee (endorse) your loan or credit to give you the chance to prove yourself.
On the other hand, be sure to make your payments since in the event of default, this obligation will revert to your endorser and this may also taint his credit file.
But be careful, if you know that you cannot afford to repay a loan, then avoid this tip!
9. Check your credit report regularly
Request a copy of your credit file from one of the credit agencies on the market or register online for quick access.
Have any errors that may be found there corrected as soon as possible. Have the debts already paid crossed out or correct the amounts of the credits if they are incorrect.
An up-to-date and error-free credit file is very important for restoring credit!