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25 Oct

How to Rebuild Poor Credit

How to Rebuild Poor Credit

Realizing you have poor credit can feel intimidating and overwhelming – how do you get a loan and work on rebuilding your score when it’s tough to get a loan with a low score? One thing to remember is rebuilding a score takes baby steps, and here are a few tips and strategies for starting to rebuild poor credit.

Rebuild Poor Credit With These 6 Simple Steps

1. Understand what goes into your credit score.

Your score is a compilation of a few different factors. They are, how much debt you have; your payment habit history; how long you’ve had credit; what kinds of credit you have; and how many new accounts you’ve opened up recently.

With those factors in mind, you can start making intentional steps to correct your poor score!

2. Know your score and stay on top of it.

CreditKarma.com is a free and easy-to-use app that allows you to keep your score in the palm of your hand and stay constantly updated.

3. Use a card the right way.

While credit can be a great lifeline if an unexpected emergency arises you don’t have funds for, it’s not a means for expanding your discretionary income. The money you have coming in each month is money that belongs to you. Credit does not function the same way. The key to using credit right is to not abuse it and to remember that it is not your money – you have to pay it back.

4. Catch up on payments.

As long as you keep amassing credit while you’re behind on payments, you’ll have a harder and harder time getting back on top. Take a break from using your credit card if you can and focus solely on catching up on payments. Just focus on one payment at a time – baby steps!

5. Pay on time.

Put reminders in your phone, set up automatic payments, schedule it into your calendar, do whatever you need to do to make payments on time.

6. See a credit counselor.

If you are struggling to pay back your loan and make ends meet, set up an appointment with a trusted financial adviser, like one of your Signet loan officers!

Helpful Resources for Further Reading

Below are a few links from trusted sources about more tips, tricks and strategies you can implement to rebuild poor credit.

  1. MyFICO.com
  2. TheBalance.com
  3. The Federal Trade Commission