4 Tips for Rebuilding Your Credit

A poor credit score is anything below 580. If you’re struggling to pay off multiple credit accounts, then check out these four tips for rebuilding your credit.

1. Review Your Credit Rating

The first step is to obtain a copy of your credit rating. Be sure to examine your report thoroughly in order to determine any trends or problem areas. This is also a good time to review your credit history for any errors that may be negatively affecting your score.

2. Past Due Accounts

Your payment history accounts for 35% of your credit score, which means that several past due accounts can severely lower your rating. Many individuals attempt to close unused accounts, thinking that this will eliminate their debt. However, closing your accounts will reduce your available credit ratio. Try to pay off your outstanding and current debts by following the snowball strategy:

• Make the minimum payment on all accounts.
• Use as much money as possible on the highest credit card or account balance.
• Once your first credit card is paid off, take that payment and combine it with the minimum for another card.
• Continue this process for all credit cards and accounts.

3. File for Bankruptcy

Chapter 7 bankruptcy and Chapter 13 bankruptcy are no more detrimental to your credit score than the financial circumstances that put you here in the first place. Bankruptcy actually allows you to expunge many of your debts and start from scratch, depending on which Chapter you decide upon.

Bankruptcy can be a great tool when used appropriately. Let our bankruptcy lawyers with Cutler & Associates, Ltd guide you through the filing process.