By Calvin O’Neal Russell Jr

Rebuilding credit can seem like a frustrating task. Many consumers give up and eventually file for bankruptcy, which is the worst decision to make as this will make future credit building more difficult. After viewing over 50-60 credit reports per day, I have personally seen consumers bounce back into the high 600’s and 700’s in less than 6 months. Most of the consumers had 3 things in common.

New Line Of Credit: Consumers with low credit scores usually need a new positive line of credit. This means that they should look into opening up a new credit account, preferably a revolving account. Revolving accounts consists of credit cards, department store credit cards, or charge cards. This new line of credit will give the consumer an opportunity to show the new lender as well as future lender that they can establish a good payment history and that they can manage their debt well by not maxing out the new account.

Pay Off & Dispute Collections: Most credit reports with low credit scores have a few collections that are unpaid or worse, the collections are paid but have not been removed. Collections can decrease a credit score as much as 50 points or more. With that number being so high, its important to call the creditor and make an arrangement to pay off the amount owed. Once the amount is paid, the consumer should go online to each credit bureaus website, and dispute the collection account by updating its status to “paid account.” Once this is complete, the account will go into research and most likely be removed.

Improve Payment History & Lower Balances: 35% of what makes your credit score comes from Payment History. This was #3 because consumers with low credit scores usually have had a few late payments in the past and the damage has already been done. The best way to recover from this would be to make sure that all future payments on accounts are always on time. Not only should account always be paid on time, the balances on revolving account shouldn’t exceed 30% of the limit. For example, if you have a $1000 limit, the balance should never be higher than $300. Consumers with high credit scores tend to keep their balances 7%-10% of the limit.

Hopefully these 3 simple ways help and encourage consumers out there looking to rebuild and improve their current credit score. I, myself, had to go through this same process and it only took me 11 months to improve my score over 170 points.

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