How to Rebuild Your Credit Score - A Comprehensive Guide

How to Rebuild Your Credit Score - A Comprehensive Guide

If past financial mistakes have affected your credit score, achieving the desired level might pose a challenge. However, the journey to rebuilding your credit history is not instantaneous. By initiating proactive steps today, you can gradually forge a more positive credit trajectory and enhance your credit standing for the future.


Outlined below are specific actions you can implement to guide your credit score back on the path to improvement.


8 Steps to Rebuild Your Credit


There is no one-size-fits-all solution for improving a subpar credit score. Regardless of the reasons for your current predicament, here are some tried-and-true tips to help you restore your credit score back to where it should be.




1. Review Your Credit Reports

Understanding your credit situation is the first step to improvement. Check your Equifax credit report for free and identify areas that need attention. Whether it's high credit card balances or unpaid collection accounts, addressing these issues is crucial.


2. Pay Bills on Time

Timely payments play a significant role in your Credit Score. Catch up on any overdue payments and create a budget to manage future bills effectively. Discipline in payment habits is key to rebuilding credit.

 

3. Lower Your Credit Utilisation Ratio

Manage your credit card balances by lowering your utilisation ratio. Aim for a rate below 30%, and consider making extra payments. Exploring alternative payment methods can prevent accruing more debt.


4. Get Help With Debt

Consult a credit counselor if managing debt becomes challenging. They can guide you on creating a debt management plan, making your unsecured debts more affordable. Negotiating lower interest rates is a potential benefit.

 

5. Become an Authorised User

Ask a family member or friend with good credit to add you as an authorised user on their credit card. This strategy can positively impact your credit history. However, avoid purchasing trade lines from strangers to prevent potential credit fraud.


6. Get a Cosigner

If your credit score is low, applying with a creditworthy cosigner can increase your chances of approval and secure better terms. Ensure your cosigner understands the responsibility and potential impacts on their credit.


7. Only Apply for Necessary Credit

While multiple credit accounts can aid in rebuilding credit, avoid unnecessary applications. Numerous credit inquiries can negatively affect your score. Apply only when there's a valid reason for obtaining credit.


8. Consider a Secured Card

Explore secured credit card options, requiring a security deposit for approval. Look for cards with no annual fees and additional benefits. Some issuers may refund your deposit and convert the card to unsecured after consistent responsible use.


Extra Tip Utilising Boshhh SIM and Credit Building Service


Consider incorporating Boshhh SIM and credit building service into your credit rebuilding strategy. Use our in-built app designed for all our members, powered by Equifax.  

Frequently Asked Questions


What Are the Credit Score Ranges?


Understanding credit score ranges is crucial. They typically range from 300 to 850, with higher scores indicating better creditworthiness.


What Factors Influence Your Credit Scores?


Several factors influence credit scores, including payment history, credit utilization, length of credit history, types of credit, and new credit accounts.


How Long Does It Take to Rebuild Credit?


Rebuilding credit is a gradual process. While there's no fixed timeline, consistent, disciplined efforts over time will yield positive results.



Back to blog