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Rebuilding Your Credit
| The Four Steps of the Credit Rebuilding Process
| There are four basic steps to rebuilding your credit:
1) Develop a savings habit. Saving as much as you can is important, but saving regularly is even more important. Get in the habit of regular contributions to a savings account or money market fund --whichever offers the best interest rate.
2) Take advantage of any direct deposit programs your employer may offer. It's easier to get into the savings habit when the money is never in your checking account, and goes directly into your savings account or money market fund.
3) Review your Equifax, Experian and TransUnion credit histories and get problems corrected. You do not want problems to get in the way of rebuilding your credit.
| 4) After you have saved between $500 and $1,000 in savings and resolved any problems in your credit records, apply for a MasterCard or Visa. Shop around to find the card with the best terms of credit that you can qualify for. If you can't get an unsecured MasterCard or Visa, apply for a secured card.
| Credit and Saving: Four Good Reasons to Save Your Money
| Another important part of rebuilding your credit is to save. Here are four quick reasons why saving is so important:
1) If you lose your job tomorrow, the money in your savings account will help you pay your bills.
2) If you have an unexpected large expense, you can use your savings to pay it rather than having to use credit.
3) When you begin the credit rebuilding process you may need money in savings in order to qualify for a secured MasterCard or Visa.
4) Creditors will feel more comfortable about extending credit to you when you have a healthy balance in your savings account.
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