How can I improve my credit rating?

Even if you have a horrible credit rating, there are steps you can take to make improvements over time.

07:38 19 March 2014

If you have an abysmal credit rating, you know how many facets of life can be affected. It may seem as though you will never find a way to get ahead, but there are ways you can work to improve your credit rating. Most of them take time and discipline, but the results will be more than worth the effort. 

 

Here are a few ways to help you send your credit rating in the right direction. 

 

• Bankruptcy—everyone experiences difficult times, and for some of us it’s more difficult to manage than for others. We can get into debt that is not manageable, but instead of letting it continue to ruin your credit and life, you can go through bankruptcy. Include a statement on your credit report if you had unusual circumstances that contributed to the situation.

 

• Credit cards—make sure you do not have too many credit cards, and no matter how tempting it might be, do not use them to make purchases for unnecessary things. Try to only use them for paying off other debts you have at higher interest rates.

 

• Regular payments—simply sending in your payments on time, and on a regular basis can build your credit rating up significantly over the course of a year. The more accounts you can pay regularly, the better your rating. If you worry about your ability to remember multiple payments, use a direct payment option.

 

• Review all statements—your banking accounts, credit cards, savings account, investment accounts and just about anything else related to finances comes with a statement of activity. This can be on a quarterly basis, or monthly. Always review these to make sure the activity is legitimate. Your credit rating can be damaged by identity theft and fraudulent purchases that are overlooked on monthly financial account statements.