Many people are struggling with the recover of the Great Recession and in that, still tying to figure out their credit and debts. Well, they aren’t alone. A lot of people trying to rebuild or build their credit aren’t quite sure where to start.
The first order of business is to establish your credit. This part is easy – just borrow money and pay it back. Although it is easy, be sure to do it right- pay back the full amount and on time. This will only further a good credit score. The action of borrowing money can be done in more than one way. You can start small and apply for a credit card to use, you could also take out a loan but that’s one of the bigger processes. So, while you’re starting small, use your card but again, be sure to be responsible, don’t go crazy with this borrowed money and pay it back on time.
Now let’s talk about those big things, loans. You can take out small ones, and big ones. Credit unions will usually offer you any loan under $1,000 to take out for starters. This loan isn’t to be spent on small petty things, put it in savings and paid off on a monthly basis. When it’s all paid off, the full amount including interest is given to you. Now that you’ve successfully handled your first loan, this, too, builds your good credit.
As one final tip, keep away from debt collectors. They will only cause trouble for your credit. If you do find yourself in the position of having bad credit though, there are ways to rebuild it. You should get in contact with credit-reporting companies and see about getting a free record of your credit to see what exactly your credit looks like.
You’ll need to repay your debts, this is very vital to your credit. If full repayment isn’t possible, you can try and negotiate with the debt collection agency to pay a partial payment. However, once a debt is filed on your credit, it takes a full seven years to erase. However, if you’re sued by a debt collector, it takes four years until that case can be thrown out the window. This doesn’t mean your debt will go away after those four years though, you still have to wait those seven years for you and your debt to be out of the woods and you can rebuild your credit with the tips mentioned previously.