How to Rebuild Your Credit
- 1). Pay on time and avoid delinquencies. Unpaid credit card bills and loans will lower your score. Be aware of your due dates and always pay on time to increase your credit score and improve your history. Payment history makes up 35 percent of credit ratings, according to the Fair Isaac Corporation, or FICO, website.
- 2). Lower the balance on consumer debts. Give your FICO credit score a quick jump by paying off credit card balances. If you can't pay off balances, increase your monthly minimums to pay down the debt, and then keep balances below 30 percent of your credit limit.
- 3). Watch your number of inquiries. Because inquiries can shave points off your score, only apply for a new credit account when necessary to help rebuild your credit.
- 4). Use the piggyback method. Adding your name to a family member's credit card and becoming an authorized user can help rebuild your personal score, as long as the account is in good standing. This good account will appear on your personal credit report and help increase your score.
- 5). Get a secured credit card and start over. If your old accounts closed after a bankruptcy, go to your bank and get a secured credit card to start rebuilding your score. This requires a security deposit of around $500. Pay this new account on time and your score will slowly increase.
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