Your Road to a Perfect Credit Report

Most people will strive to maintain and build a spotless credit record. The benefits associated with it are well known and numerous, as are the disadvantages in for those who no longer have it.

Rebuild Credit Now

But what if somehow you get some bad marks on your credit report? What can you do about it? All is not lost, but it will take pretty long for you to rebuild credit to restore it.

You should know that all bad marks stay on your credit report for seven years (and bankruptcy is mentioned on it for ten years).

However, you won’t have to wait seven years to enjoy the benefits of those considered low-risk borrowers. It is possible to start rebuilding your credit history if you do well.

But you shouldn’t fall into the other extreme either, imagining that you can repair your credit rating in a few weeks or a couple of months.

Advertisements promising to restore your credit record in 30 days, are nothing but scams. They lure people into making large upfront payments and then offer solutions that are either illegal, or that could have been found for free with a bit of research.

Any reputable credit counselling agency will tell you that rebuilding your credit history will take a few years.

Setting up a checking and a savings account is a first good step if you’re just starting to build your credit history. Not having these accounts will earn you fewer points in your credit score.

If you’ve never owned a credit card before, you should consider starting with one that charges a low interest rate and has a credit limit that you can easily manage.

Make sure you borrow only what you can afford to repay, and keep your balances within safe limits. In time, you’re going to get additional credit cards – most people typically own between two and four.

Using them responsibly will improve your credit rating, because it will prove to lenders that you are credit worthy.

If you’ve had problems in the past, you may have to start to rebuilding your credit history by applying for a secured credit card. In time, if you are not late with your payments, you’ll be able to own a regular credit card again.

A simple general rule is not to file too many credit applications and keep your debt to income ratio below 20%. The reason is that each inquiry for a loan or a credit card will be mentioned in your credit report.

While there is no rule as to how many inquiries you can safely have, more than four over the past year will probably cause you to lose some points from your credit score.

If you’ve worked for the same employer for at least five years and if you’ve lived in the same home for at least four years that will also help you gain points.

To make sure there are no inaccuracies on it you should read your credit report carefully. You should ask for a copy from all three credit reporting agencies, just to be safe.

Good financial behaviour is the key to building a spotless credit history. It doesn’t require any special skills, just care and responsibility.