Bad credit can feel like a hole it’s impossible to climb out of, but that’s only because many of us don’t know how to get out of it in the first place. There are many ways to recover from bad credit, and some of them might surprise you.
The simplest is actually not that complicated; keep up with your debts and simply wait. If you don’t fall behind or otherwise mess up your finances, your credit will mostly recover in seven to ten years.
Yes, that’s a long time, but we bring this up first to make an important point: Your credit, if you stay on top of your obligations, will slowly improve over time. You are not doomed to have bad credit for the rest of your life. That said, there are other steps you can take.
Automate Your Payments
One of the most common problems many of us run into paying bills on time is the short window between when you get the bill and when you need to get that payment in the mail. So, to help keep up your credit and to make it dependent less on your memory, automate payments. Everything from your utility bills (and yes, those are on your credit report) to your credit cards offer an automated option these days. You don’t even need a computer; most creditors offer an app. Just connect them to the same account where you deposit your paycheck, and let computers keep you abreast of your bills.
Get Current Where You Can
If you’ve fallen behind on your bills, the best thing you can do, right now, is catch up. Late payments on your credit report won’t go away; they’ll still need to gradually fall away over time. But if you’re current on your accounts, that will be reflected in your credit score, and often that’s more important to those looking at your credit report than a delinquency in the recent past. Keep in mind that any collections will still be on your account even if you pay them off.
Look Into Credit Counseling
Credit counseling isn’t for everyone, and can be a tricky option depending on your personal situation and who you choose to work with. That said, if you choose a good agency and work closely with both them and your creditors, you can often limit the damage to your credit.
That said, research any agency you work with thoroughly. There are many “credit counseling” agencies that won’t help your credit and leave you worse off than before. A little care and study will go a long way to protect you.
Rebuild Your Credit Score With Loans You Can Afford
It seems counterproductive, when you have bad credit, to borrow. But the truth is that, especially with poor credit in the past, you need to begin building a better credit reputation to more quickly improve your score.
An auto loan is an excellent example. If your credit isn’t great and you need a car, finding an auto loan that fits your budget will help you establish a consistent, on-time payment history. So, look for opportunities to build your credit; it will make your path to a better score that much shorter.