Five suggestions to help rebuild your credit

Here are five suggestions anyone can use to rebuild credit:

1. Get a secured credit card. Secured credit cards report your credit payment history information to the credit bureaus just like a regular credit card. They are "secured" by your money, which you deposit in a FDIC or NCUA insured bank account for this sole purpose. You can get one for free if you look around.

2. Get a department store card. These cards are often easier to qualify for than a general-purpose bankcard. Be aware though, that they may carry a high interest rate. Be sure to pay your charges on time, and in full, each billing cycle to avoid paying interest. You will still accomplish your goal of building positive credit in your name, with the added bonus of staying out of debt.

3. Give yourself a loan. Open a passbook savings account in a bank or credit union. Then take out a low-interest loan using the passbook as security. The bank will report the loan payment experience to the credit bureaus and your credit will improve.

4. Get a copy of your credit report. If you are being turned down for credit you need to be sure the reason is valid. Many credit reports have errors. With over a billion items a month showing up at each bureau, it's no wonder some end up in the wrong credit report. Dispute any inaccuracies you find.

5. Get a credit report from all three bureaus. Each one may have different information and maybe errors in your file. You can't know which bureau's data will be used to evaluate your credit application, so check them all.

One last suggestion: don't apply for every card offer that comes your way. Each one generates an inquiry in your file. Too many inquiries can hurt your credit.

The thing to remember about your credit report is that time is your best friend, as you keep adding positive information to your credit report over time, any negatives will first be diluted and then begin to recede in importance. They won't drop off completely for seven years in most cases, but they do become less important to future creditors evaluating your credit-worthiness.
I also suggest that you develop a workable budget if you don't have one yet to keep surprise expenses from sabotaging your efforts to rebuild your credit. Good luck!