How to repair your credit

Updated: Nov 3, 2020

Don't let the credit repair process overwhelm you. AMERISHOP FINANCIAL is here to help!!

Repairing your credit is not as difficult as you've probably heard it said, but it does take time and diligence. Just use this guide and follow the steps to analyze your credit report, find the mistakes that could hurt your score, get tips on how to dispute those mistakes, and avoid scams.

Steps to Rebuilding Your Credit Score

1. Open a Bank Account For those who have bad credit, opening a bank account may be easier said than done. You may have to check around, but there are banks (such as Wells Fargo) that offer “opportunity” accounts to those who have bad credit. Just be prepared to live with limited services and higher fees until you are able to rebuild your credit.

You should also check with your local banks and credit unions, as they are more likely to be willing to work with you. You can find a credit union near you by going to the National Credit Union Administration (NCUA) website.

2. Get a Secured Credit Card Obtain a Unsecured credit card by using your bank account as collateral. With a unsecured card you can charge up to the amount in your bank account. Avoid cards that charge an application fee, and look for cards with low annual fees. Also, make sure to choose a card that will be reported on your credit report, and, if possible, select a card that will convert to an unsecured card after one year of making on-time payments.

3. Obtain an Installment Loan After working with your bank or credit union for several months and proving that you are a good customer, you may be able to convince them to extend an installment loan to you. Keep it small – less than $1,000, if possible.

The purpose of the loan is not so much to make a purchase as it is to give you another opportunity to show how responsible you are about paying your debts. Keep the loan amount and the payment amounts small enough so that you are sure to be successful in making all payments on time. This is the time to show that you can make regular payments. The best way to do that is to set up automatic payments through your online banking system.

4. Pay Your Student Loans If you owe money on your student loans, then make paying them a priority