4 Ways to Rebuild Your Credit

May 31st, 2014 by

Poor credit can negatively impact every area of your life. With poor credit, you can have a hard time getting approved to buy a car or a house, and you may even get passed over for some jobs. It is important that you do everything you can to preserve your credit.

If your credit has already taken a hit, all is not lost. There are plenty of things you can do to start rebuilding your credit and taking back control of your financial future. Here are just four things you can do to rebuild your credit:

Make Payments on Time

Making payments on time is one of the best ways to establish a positive credit history. Even with bad credit, you may still have old credit cards or student loans in your name. Making timely payments on these can start tipping your credit score in a positive direction. If you are looking for a new car, shopping at buy here pay here dealers can also help you get a car loan, even if you have bad credit. By making timely payments on this loan, you can start to rebuild your credit.

Pay Off Delinquencies

Delinquencies can continue to be reported to credit agencies and negatively impact your credit report for years. Work hard to pay off delinquencies as soon as possible. Even if you can’t pay them off entirely, call your creditors and work out a plan to pay them off over time. In some cases, if you are making payments on the debt, it will no longer be listed as a delinquency on your report.

Keep Your Debt Ratio Low

The amount of debt you have compared to your income is called your debt-to-income ratio. If you owe a lot of debt but don’t make a lot of money, your debt-to-income ratio will be high and that will bring down your credit score. The best thing you can do is pay off whatever debt you can. If you have credit cards, you can also transfer the balances to one or more cards with higher limits. It is better to have three cards with low balances than one card that is maxed out. Keep your ratios low.

Get a Better Job

Another way that you can raise your debt-to-income ratio is to make more money. Getting a better job can help you to improve your credit report and raise your score. Of course, getting a higher-paying job can be easier said than done, but if you can pull it off, you’ll notice a big difference in your credit.

Even if your credit is not as good as it can be, you may qualify for an auto loan through a buy here pay here dealership. Come in to McCluskey Automotive today to find out how we may be able to help.