What is your goal for fixing your credit?

From a scoring perspective, focus on canceling credit cards with smaller dollar balances first to reduce the number of credit cards with balances. Keep in mind that you don't close any credit card accounts; doing so will not help you qualify. But whether it's 6 to 12 months or 2 years, the time it takes to improve credit ratings is worth every letter, phone call, frustrating, heartbreaking and victorious moment. It can take 6 to 12 months or longer to recover from lost income.

Meanwhile, Your Credit Obligations Continue. This should be independent of your college, retirement, or investment savings. Maybe less going out to dinner, specialty coffees, beer or spirits. Reducing is not for life.

It could simply be for 12 months, or until you accumulate emergency savings. Since the national savings account interest rate is 0.08 percent, it's worth considering a high-interest savings account to get the most out of your money. Keep in mind that your scores may suffer a slight drop due to difficult queries, but it won't affect scores for long. Even though credit inquiries remain on your credit report for 2 years, FICO Scores only considers inquiries from the past 12 months to calculate scores.

All of these credit accounts should be considered starter cards just for rebuilding credit. After 6 to 12 months, you may qualify for unsecured credit cards with higher rewards and credit limits. It's never a good practice to load your credit history with these types of low-limit starter cards. Credit card issuers tend to reflect the credit limits you currently have when approving accounts.

Many accounts with small limits can make it difficult to achieve higher credit limits. For example, if the payment due date is January 15, the statement closing date will typically be approximately 3 days after the payment due date. The balance on the closing date of the statement will be reported to the credit bureaus. Using 100% of your available credit means you've reached the maximum.

But it's worth noting that FICO's scoring models take into account both your overall usage (on all of your cards) and the individual usage of each card. You Don't Always Need Upfront Money for a Credit Construction Loan. Self-lending credit: Builder loans allow borrowers to make monthly payments for 12 months. Monthly payments are deposited into an FDIC-insured certificate of deposit account.

Payments are reported to major credit bureaus Experian, Transunion and Equifax. Credit cards secured for rebuilding will be the easiest to qualify for because your deposit guarantees approval. Using escrow cards for 6 to 12 months will qualify you for better credit cards with higher rewards and limits. Paying off your debt should be a top priority, especially if you owe a lot.

Take a look at the debts in your report and add up the total. Based on that total, choose an amount you want to settle. This amount is up to you, but the more you pay, theoretically, the more your credit rating will change, assuming no new debt is added. Your credit score is one of the most important measures of your financial health.

Tells lenders at a glance how responsibly you use credit. The better your score, the easier it will be for you to be approved for new loans or new lines of credit. A higher credit score can also open the door to the lowest interest rates available when you borrow. To be clear, the goal of credit repair is not to increase your credit rating.

The goal is to eliminate errors in your credit report. But most of the time, doing so improves your score. Once again, there is a chance in twenty that you will make a mistake that is reducing your score by at least 25 points. There is no quick fix for your credit.

Negative but accurate information (such as late payments, cancellations, or collection accounts) will remain on your credit report for seven to 10 years. However, there are steps you can take to start building a more positive credit history and improve your credit ratings over time. Only when your credit goals are met, consider adjusting your budget, but until then, stick to a fairly rigid budget on the journey to great credit scores; or, if you don't like budgeting, consider additional work to make extra money. Once you reach your credit goals and improve your credit ratings, you'll have cards with much higher limits to choose from, meaning you can spend more even while practicing this strategy.

If your goal is to improve credit ratings, remember that having a healthy savings account is just as important as having excellent credit. . .

Gwen Dasilva
Gwen Dasilva

Entrepreneur. Proud coffee advocate. Wannabe music fanatic. Certified twitter enthusiast. Coffee geek.