Rebuilding your credit isn’t a hard feat but many people tend to think it’s a hard task when in reality it only takes a few good years of on-time payments and responsibility.   Yes, I know that sounds really simple and easy but many people just look past that and think there’s some sort of magic formula.  There isn’t and this is how I’ve build my credit up for years.

For all of you out there that want more tips when it comes to rebuilding your credit, I’ll give you some pointers so that you can apply for those loans and get the best rates possible.

Have a few revolving credit lines

It’s always nice to have at least 2-3 revolving credit lines that are active on your report.  Your goal here to pay them off in full each and every month.  If you miss one payment, that right there can lower your score enough to hurt your chances to get a good rate.  In my opinion, I would have at least 3 accounts that you use monthly and make sure you either pay them off in full each month or on time.

Never max out your credit cards

I don’t care how many credit cards you have, you never want to max them out.  This is a bad sign to new lenders because they will be afraid that you will do the same to them.  When your debt to income ratio gets high, your chances of declaring bankruptcy increases drastically.

Try and settle old debts

If you have older debts on your credit report that haven’t been settled yet, you’ll want to call up the three credit unions and that lender to get things resolved.  If you remove one negative report on your credit report, this can increase your score alone.

Don’t apply for too much credit

Just like your debt to income ratio, if lenders see that you have too much credit available to you, this can be a downfall too.  What happens if you need all of that credit all of sudden because of a job loss, etc?  This can spell danger to most lenders and this is why it’s important that you just settle for a few lines of credit.

Rebuilding your credit isn’t that hard and it just takes a few years depending on your situation.  Pay your bills off on time, don’t have too much credit available or on hand and if you have the patience to see if pay off, you’ll be getting low interest rate loans in no time.