If you have had some recent credit issues you will want to restore your credit so you can begin qualifying for home and auto loans again. Credit restoration is something that consumers can do for themselves without having to pay a financial expert, according to Stacy Johnson, writing on the Money Talk News website. Try DIY credit restoration to raise your credit score and save money at the same time.
Clean Your Report
Each American consumer is entitled to one free copy of his credit report from each of the three major credit reporting agencies once every 12 months, according to the Federal Trade Commission. Order your reports and check everything for accuracy. Make sure your personal information is correct including any aliases you have used and all of your past addresses. Check all credit accounts on your report to make sure that information is correct, including payment history and the status of the account. If you see any errors, use the dispute procedure outlined on the credit report to get the errors fixed. Errors on your credit report can cause continuous problems with your attempts to establish good credit.
Bank Accounts
If you do not have a checking and savings account, then establish them with a local bank. Use your checking account often and be sure to avoid events such as bounced checks or overdrafts. Begin putting money in your savings account and do not touch it unless it is an emergency. Part of restoring your credit is showing creditors that you are able to manage your cash. The activity in your checking and savings accounts will stand as proof of your financial management skills.
Credit Card Accounts
An important step in restoring your credit is to pay your credit card accounts down and then to not use your cards extensively, according to Shelly K. Schwartz, writing on the CNBC website. This shows an ability to maintain your current lines of credit. Creating more available credit by paying down balances also helps your credit scores. Pay your credit bills on time and pay at least the monthly minimum payments. When you do use your credit cards, only use them for as much as you can afford to pay back in a month.
New Credit
When you are restoring your credit, do not take on new credit accounts or installment loans, according to the CNBC website. Work with the credit accounts and installment loans you have, and use them to restore your good credit rating. Taking on more credit when you have recently had some credit problems will cause your credit score to drop again. Wait until you have your debt under control, and your credit score has risen to your target point, before you start taking on new accounts.
