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Ways to Build and Rebuild Your Credit

Credit scores have become increasingly important in recent years and can affect everything from your eligibility for student loan refinancing, to the interest rate on your home-equity loan, to the premiums you pay for auto insurance. If you have damaged credit, you will be forced to pay hundreds or even thousands of dollars more than a person with a clean credit history.

One of the best ways to avoid having to rebuild credit is to never let it go bad in the first place. One of the best ways to do this is to start building credit early. Utilizing a student credit card in college is a great way to start early (if it is used responsibly). No matter where you are in the stage of your life, make sure to know the factors that affect credit score and work to hit the optimal targets.
If you do have poor credit, whether it is due to identity theft, bankruptcy, inability to pay your bills on time, or any other reason, you can rebuild your credit. It will take a lot of time and effort but when you are finished you will be rewarded with lower interest rates on loans and credit cards.

But be warned, you cannot rebuild your credit overnight. Be prepared to spend many hours following up with creditors and collection agencies. It is important to stay organized and keep records of everyone you speak or write to.

It will also be helpful to read The Fair Credit Reporting Act. It’s long and not particularly interesting, but it will give you an understanding of your rights as you go about repairing your credit.

Do-it-yourself credit repair:

At some point, you will have to decide whether or not you want to rebuild your credit yourself or hire someone to do it for you. It’s a personal decision and I won’t tell you what to do. It really boils down to your willingness to deal with the work involved and how much time you have to spare.

If you decide to do it yourself, you’ll have to start by ordering a copy of your credit report. Once a year, you can order a free copy online at AnnualCreditReport.com. You should go over the credit report very carefully and make note of anything that is incorrect or not up to date.

You will have to stay organized and keep careful records. You will have to contact each lender get everything in writing. The credit agencies will require written documentation before they take you seriously. Be prepared to spend a lot of time correcting your credit report.

Credit repair specialists:

If you decide that you don’t want to do it yourself, you can hire someone to repair your credit for you. Just be careful that the firm you hire is reputable.

The longer you wait to start fixing your credit, the harder it will be.


  1. I’m glad you mentioned the importance of building good credit from the outset. While paying cash is generally my preferred method, I have taken care to cultivate an excellent credit score just in case I decide to borrow money or refinance my mortgage.

  2. Marcella Brient

    Great website. Plenty of helpful info here. I’m sending it to a few friends ans also sharing in delicious. And certainly, thank you in your effort!

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