If you are grappling with a troublesome history of loan repayment issues, debt payment challenges, and/or other credit complications, improving your credit rating may appear to be  nearly impossible.

Having a bad credit history could result in being denied credit, paying higher expenses to obtain credit, and may detrimentally impact your reputation and other components of your life – such as the ability to obtain an apartment, a cell phone, or even a land a job. Lenders view bad credit as an indication that you are a high risk, financially. Property managers may view you as an individual that will fail to pay appropriately each month for rent. Employers may view you as an irresponsible individual that is unable to manage money and other obligations. If you have a bad credit history, it is time to rebound from that challenge. Continue reading to learn how!

Start with Your Credit Report

The first step to rebounding from a bad credit history is ordering your free credit reports. Once you obtain these reports, you should look to see if any errors are present. These reports generate a score that helps to predict if you are likely to repay your debts, and how reliable you are, in general. These reports are providing by three different credit bureaus – TransUnion, Experian, and Equifax. You are entitled to one free report from all agencies once a year. To initiate the process, simply call 1-877-322-8228. If you find an error, dispute the information, in writing, with the credit bureau and the source reporting the error. Correcting errors could drastically increase your credit and aid in rebounding from a bad credit history.

Pay Down Credit

Once you have your credit reports in hand, you will be able to see all of the creditors that you owe. You should make a plan to pay down with each of these. You may choose to pay off one at a time, or you may pay a little each month to each – the choice is yours. If the creditors are credit card companies, avoid canceling those cards. Instead, leave them open. The overall amount of credit that you have at your disposal has the ability to positively impact your score. If you no longer want to use the cards (which is probably a good idea if you are reading this), simply cut them or shred them.

Avoid Applying for New Credit

As you start paying down your creditors, your credit score will improve. As a result, you will likely get many new credit offers. Despite the temptation, you should avoid applying for new credit. Each time that you apply, a hard inquiry is made on your report. These stay on your report for two years. Additionally, they lower your score. You should simply focus on paying your bills on time, reducing that which you owe, and watching your score improve.

If you would like more information on how to rebound from a bad credit history, contact us at Somerville National Bank today: http://somervillebank.net/contacts/