How to Get Your Credit Back on Track
Published March 11, 2011 | Updated December 1, 2011
Following a job loss, serious illness, or other life event that strained your finances, it’s not uncommon for our credit scores to also suffer. There are several things you can do to get your credit back on track and rebuild your credit score.
The important thing is to start now, because it can take time to improve your credit score. Late payments, foreclosures, accounts in collection, and Chapter 13 bankruptcy can all remain on your credit report for seven years. A chapter 7 bankruptcy will remain on your credit report for ten years.
- Consider working with a credit counseling agency. If your debt situation is serious, you may want to consider working with an agency that can communicate with your creditors on your behalf. A good resource for finding a legitimate credit counseling agency is the National Foundation for Credit Counseling. Legitimate credit counseling agencies generally work with you for no cost, or a very minimal fee. If a company asks for up-front payment of thousands of dollars to help repair your credit, run. These are usually scams.
- Set up automatic payments to your creditors through Amplify's Online Banking. Even one late payment can have a negative effect on your credit score. And while it's true that you can bounce back from a late payment within a few months – it's better not to have to worry about it at all. Taking half an hour now to check your bills for payment due dates, and then setting up automatic payments, can help to safeguard your credit score.
- Communicate with your creditors. Contact your creditors as soon as you think you may not be able to make a payment on time. If it's truly a one-time occurrence, many creditors will work with you – for example, they may extend your due date or waive a late fee.
Honestly there's no quick or easy way to repair your credit. Anyone who promises you otherwise probably does not have your best interests in mind. But taking those steps now will pay off in the future in reduced interest costs and improved peace of mind.