Okay, you’ve begun to get your credit reports cleaned up, so you can now begin re-establishing your credit. You need “positive” ratings on your report! There are several ways to accomplish this...

1. Open a checking and savings account. You’ll need to have these when applying for credit.

2. Apply for a “secured” credit card. With a secured credit card, you deposit money with the credit card issuer to be held as a guarantee.

For example: You deposit $300.00. The credit card issuer will open a “savings” account with your $300.00 and in turn, give you a credit card with a $300.00 limit. You’ll make payments, etc., just as with a regular credit card; however, in the event that you do NOT make your payments, the credit card issuer will use your $300.00 to pay off your balance.

Note: Always make sure before applying for a “secured” credit card that the credit card issuer will report to all three credit card bureaus. If they don’t report to the bureaus, you’ve not done yourself any favors.

Also, some “secured” credit card companies will allow you to convert your account from “secured” to “unsecured” after a period of time (generally, 1-3 years). This means that they will refund the amount you secured the card with and often with interest, too!

3. Lenders seem to prefer a ratio of less than 25% owing versus your available credit, so try having your limit raised...IF you have made your payments on time and have a good payment history with the Creditor. (Be careful: you do not want the percentage of your available credit to your income to be too high.)

4. Close unused credit accounts. You don’t want potential Creditors to think your available amounts of credit exceed your ability to pay them. If you’re not using the account, close it.

5. Apply for department store credit cards. Don’t attempt this, of course, until you’ve managed to remove most of the negative items on your credit report. Once you receive a new department store card, go out and charge on it, but MAKE YOUR PAYMENTS ON TIME (*ahem*). Do not charge to the maximum limit available. I charged about one third of my limit, paid that amount within a three-month period, then charged again and repeated the process. You need to be able to afford the amount you’re charging, though!

In the end, re-establishing your credit rating boils down to patience. Lots of it. Send your letters, wait for responses, and send more letters if necessary. (If things get removed after the first letters...it feels WONDERFUL.) It takes time to improve your credit rating, but in the long run, you’ll be better off for it.

I wish you the best of luck and hope that my site has proved to be a valuable tool in your effort to improve your credit rating!

If you have further questions on credit repair, please read through the FAQ section of our forums!  Also, you may want to move on to ”Credit Scores”, as these are what determines your “credit-worthiness”.

--arin