Quick Tips On Rebuilding Your Credit

Understanding what it takes

Rebuilding your credit requires that you first need to reduce and eventually clear your debt. Debt reduction and elimination requires your commitment, discipline, and an almost obsession. While the steps for rebuilding credit are very simple; the challenge is to stay the course and keep on track.  

Cash Is King 

Stop further debt.  Excessive borrowing, be it loans or credit cards, is the cause of most debt problems. Only borrow what you really need. Remember, when you plunk down the plastic you are actually taking out a revolving loan at rates way higher than your auto loan or mortgage.  Think in these terms.  Do I really need to take out a loan for a movie ticket?  If using plastic is just a convenience, use your ATM or Debit card.  Cash is king and you won’t be hit with any interest.  New debt for things you absolutely need, should be for the short term and you should aim to clear them within a few months. Do not let your “new” loans become a part of your debt problem. 

Evaluate Your Spending 

This is the obsession part.  Evaluate how you spend your money and how you can optimize your cash flow.  Simple things like packing a lunch instead of eating lunch out.  Taking the time to research and use coupons. Control utilities cost by using CFL lights, repairing drips, insulating your water heater.  Save the planet and save money at the same time.