Re-Establishing Your Credit - 3 Simple Steps to Getting Back on Track

Rebuilding your credit takes time, but with a little work and patience you will be back on track sooner than you think. The following steps will help you get to a clean start.

Step 1: Borrow Again

Believe it or not, the first step to re-establishing your credit is to borrow money! You need to show lenders that you are now in a position to make regular, consistent payments on a loan or credit card. But you’ve just been through some credit challenges – who will lend money to you? There are a number of loans and credit cards that are easily accessible no matter what your credit history:

 RSP Loans – not only are these loans at a low interest rate, but they are also easier to obtain because the lender is holding onto the security – the RSP. In addition to helping you re-establish your credit, the RSP is a foundation for re-building your net worth.
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 Secured Credit Card – Lenders offer secure credit cards where you provide a deposit and the lender gives you a credit card for the same amount. For example, you place a deposit of $2,000, and the lender grants you a credit card for $2,000.

Finance companies such as Wells Fargo and HSBC Finance will grant credit to people who have had some credit challenges in the past. Many mortgage lenders will not consider these accounts as re-established credit, so you may be better off waiting until a traditional financial institution, such as a bank or credit union, will lend you the money you need.


Step 2: Make the Minimum Payments

When your minimum payment due is 10 or 12 dollars, it is easy to forget to make the payments and instead wait until the amount owing is more substantial. From a credit perspective, that’s a big mistake. The credit companies want you to make your minimum payments, no matter how small they are. If making monthly payments is difficult for you to do because you work hours vary or you travel extensively, consider having the minimum payments come directly out of your bank account each month.


Step 3: Be Patient

Re-establishing your credit takes time! In fact, most lenders want to see at least 2 years of re-established credit before they consider you to be a strong mortgage applicant.

No matter where you are in your credit repair cycle, Mortgages for Women has options for you. To learn more, contact us at 1-888-372-7367.