I do not know if this is the right spot to ask this question but.
Question: .we have unfortunately, because of bad spending policies when we were >younger, gotten ourselves into a “bad credit” situation. In other words no >one will take a chance on us at this late date because we have not even >tried to obtain credit again. I am in Canada, so I am not sure if any of >our friends to the south can help, but, does anyone here know how to rebuild >credit? I would love to try some of the credit card ideas to try to build >up some savings for our old age, which is just around the corner for us!
Answer: On msn.com there is a community called “Your Money”. There are lots of good members that can help. There’s really now way to quickly and easily rebuild credit; it took you time to get to where you were at, it might take time to get out of it.
What is your present financial situation like? When you had bad credit before, did you declare bancruptcy, or did you have a string of late payments? Are any of your old items outstanding?
Look at your present financial picture. Write up a budget – all income and all expenses. When I did my income, I used my normal pay, not including overtime. Compare the two – what’s left?
Create another budget category – and call it savings. After you pay all of your bills, put something into savings – and leave it. Do you have a plan at your jobs that will allow you to put something away? Do it if you can – this is easy because you don’t see the money. Work on building your savings to at least $1000.00 or a month’s expenses. If you’re worried about spending this money, put it in another bank or try an online bank – ING Direct is paying ~3% on savings accounts now.
If you have outstanding debts, work on paying them off. If, after you write your budget you find yourself with $300.00 to spare, put 1/2 in savings and 1/2 towards an outstanding bill. Don’t split the amount up over all of your bills. Target your debt with the lowest amount on it, and work on it until it’s gone. Then take your next debt and pay it – pay what you were paying on it before and add to it the amount you were paying on the bill you just cancelled. This is called “snow balling”. Some folks work on paying off their debt with the highest interest first, I paid my lowest amount off first because all my %s were the same.
Another thing to do – if you have outstanding CC balances that are killing you, call up the card companies and ask for a rate reduction. If you’re nice to the person on the phone, they can usually do this for you. BE NICE. Many places take notes when you call (I know JCrew and Spiegel do), so if you chew someone out the CSR (customer service rep) might have made a notation that the caller was denied a rate reduction.
I also make it a point not to let my CC lines of available credit exceed 10% of my income.
Have you tried to obtain a CC since? Apply for one with your bank. Store credit cards usually don’t have the same weight as bank CCs (Visa/Mastercard). Use the card smartly, pay on time each month. Don’t spend what you don’t have! Some folks say to leave a little balance on the card from month to month, I’ve never done this and my credit is fine.
Lastly, this really should be first, get a credit report. In the US if you’ve been denied credit you can get a report for free. Usually banks can get you one for cheap and will be willing to review it with you. A local credit bureau can do the same.
Ask more if you need to. I just got myself in good standing again after having a business fail. It wasn’t pretty. My credit was bad for a while, now it’s great again. It takes time.
Good luck! You’ve already taken the first step. 
Related Posts
Filed under: Bad Credit Loan
Leave a Comment
XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>
TrackBack URL | RSS feed for comments on this post.