How To Start My Credit History Over
- 1). Obtain your credit report and scan the data for any errors, such as accounts you paid off long ago yet still show a more recent delinquent date, accounts you are sure you never had, or any other errors. If any are found, follow the requirements necessary for challenging an entry through the reporting bureau from whom you received the report.
- 2). Pay off any outstanding debt. If necessary, attempt to procure a second part-time job alongside the primary job to generate extra funds for debt payoff. Any outstanding debt will continue to damage a credit history even while attempting to rebuild it, making any attempts to repair irrelevant. Establish a budget to help in freeing up money to use for this purpose.
- 3). Save up a minimum of $500, which can be used to open a savings account with any bank who offers VISA or Mastercard secured credit cards.
- 4). Choose a bank that offers secured credit cards and file an application to open a savings account. Banks who have traditionally offered secured credit cards are Wells Fargo, Orchard Bank and Bank of America. Deposit requirements vary between $300 and $1,000. Once the funds are deposited in the savings account, they may only be accessed via the secured credit card provided at sign-up.
- 5). Purchase between $50 and $100 worth of goods or services on the new secured credit card, trying not to spend more than that each month onto the card, as credit companies frown on consistently high balances.
- 6). Pay off at least half of what is on the card every single month when the payment statement arrives, but strive to pay off the full balance if possible. Always have payments made in advance of the delinquency date, as even one late payment will be reported to the credit reporting bureaus. Both positive and negative reports are made to these bureaus every single month, and the more positive entries in your name, the more positive credit points are awarded to you.
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