Best 5 ways to rebuild your credit score

Best 5 ways to rebuild your credit score

A poor credit score can be dramatic and have a lot of consequences, but there are some ways to rebuild it that you should know.

Your credit score is basically the kind of risk that the three main credit-reporting agencies think you are. These agencies are Equifax, Experian and TransUnion.

This number (called FICO score) is calculated with a formula developed by Fair Isaac Corp, hence the name, that uses information such as your credit history, the length of it, how quickly you repay debts, etc. 

Your score can range between 300 and 850. In general, a good credit score starts at 700. And a score below 620 is considered risky.

There are a few things you can do to increase your score, although you need to know that you won’t see immediate results.

1-Check your credit score

It is scary for some people, but you need to know where you’re at and detect the areas in which you need to make adjustments. You can visit any of the credit bureaus we mentioned before, or you can access, a website that includes information about the three of them.

2- Catch up on your payments

Payment history is one of the largest factors of your credit score. Try to bring all your accounts up to date, even if it means you need to call your creditors and work out a payment plan. Be honest when telling your creditors how much you can pay and how long you expect to pay it.

3- Try to keep your credit cards open

If possible, try to avoid closing credit card accounts. The longer you have a credit history, the better for your score. Sometimes you don’t have a choice but to close your card, but whenever possible, it is a good idea to keep them open.

4- Pay off your debt

Your credit utilization is also one of the most important factors of your overall credit score, so it is really important that you pay down your debt to keep as much free credit as you can.

5- Use a Secured credit card

This is often a great way to quickly build your credit card history. A secured card requires you to keep a certain amount of money linked to it as a sort of security deposit, so you are likely to qualify for one and start building a good score.

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