=Why Credit Score Monitoring Helps You Rebuild

Credit score monitoring is possible if you are prepared to use the annual entitlement you have to look at your credit file with each of the major reporting agencies, an entitlement which is given to you under Federal law. You can also see your credit file at other times if you are prepared to pay a fee, and these extra searches will not count against your score as some searches made by potential lenders would be. Keeping a track of your score shows you how likely you would be to be able to obtain credit, and it can also alert you to other potential problems such as identity theft.

You will only get the benefit from monitoring your credit score if you understand the basics of how the system works and what each category of the chart actually means. It is also vital that you have no serious black marks such as court debts or bankruptcy on your file, because these will damage your file beyond repair until the time they expire and drop off. This will take ten years in the case of bankruptcy. These black marks will stop you from obtaining any other form of credit, even the sub-prime cards which people use to rebuild their credit rating.

Assuming that there are no such serious blemishes on your file, you will need to put into place a plan which will allow for gradual improvement of your credit score. The plan will have to start slowly, but it can pick up momentum as you go along. The first obvious essential is to pay back any and all existing bills on time every time. This alone will generate some positive repayment data which can start the ball rolling for you. There is a limit to how much your score can build from this alone, but it is the obvious starting point.

credit rating

If you are taking advantage of credit score monitoring you should already see some improvement from just this alone, allied to the fact that each existing account you have will be getting older. The age of accounts is a significant factor in one of the calculations which is used to determine the overall rating. This improvement can only progress further if you are able to access new lines of credit, and using credit cards is far better than taking out loans. You will be able to use the card and make repayments on it without accruing interest.

Make sure that you use any sub-prime credit card in the right way. Always use it for as many of your household purchases as you can, and then pay off the balance every month using the cash you would have paid. This way, you are building up an even more positive repayment profile without needing to pay the high interest rates associated with sub-prime cards. There will be another benefit when the card company decides to increase your credit limit, as you will then have an enhanced credit utilization due to having greater capacity.

Your credit score monitoring should now show that you are in a position to apply for some other forms of credit. The mortgage is the big one, and if you don't already have one now is the time to think about it. If you are able to raise a deposit of well over 10% of the value of a property, you will benefit from having the mortgage. You will be able to make more repayments, your equity level will grow in time, and your ability to borrow in the future will be greatly enhanced. This will show up clearly on your credit score monitoring.

 

 

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