Credit Karma Blog
Start Improving Your Credit Today
In today’s economic environment, credit scores are more important than ever in borrowing. Sub-prime loans are drying up and the ones that remain are getting more costly in both fees and interest rates. Most financial experts agree that the days of cheap credit are gone for the foreseeable future.
With this in mind, below are the immediate actions you can take to begin rebuilding your credit score. Obviously these steps are not always easily achieved but each action is another step towards a better credit score:
- Avoid any new derogatory actions. Each new delinquency, collection, or charge-off on your credit report will affect your credit score for years to come. Often the only way to compensate for these negative attributes is with time. Avoid these actions by limiting your spending or restructuring your debit. Restructuring may be difficult with a low score so it is best to avoid the debt in the first place.
- Don’t take on any new debt. Your debt load is a contributing factor of your credit score. The first step in eliminating debt is to stop accumulating new debt. This means having the will power to reduce spending on non-essential items. We understand this can be a very tough step, but it has long lasting affects on your credit score.
- Plan a budget to get out of debt. After reducing new debt, paying down your old debt is often easier. The best strategy is to make a budget and stick to it. Create a monthly budget of your income and expenses including a reasonable plan to pay down all your debt. As always, start with paying more towards the credit with the highest interest rate first.
- Build a good payment history with responsible credit usage. Credit cards are not evil if you are responsible and they can be a great convenience if you have restraint. If you don’t have any credit cards, apply for a credit card designed for people with poor credit. Often these cards will have high fees (this is a cost of having poor credit). With this new card, use it once or twice a month on essentials and pay it off in full each month. Demonstrate responsible credit usage and stop taking on more debt. These are some recommended credit cards for people with poor credit if you need help.
- If you don’t think you have the restraint to spend responsibly, then skip this step and stick to cash or debt cards.
Lastly, remember that building a good credit history can take a few years, but the benefits can save you hundreds of thousands of dollars in interest and fees in the long run. Each 50 point improvement will save you money and should be your milestone. Be patient and never lose hope!
Related Articles
USER COMMENTS
ENTER YOUR COMMENT
Credit Karma provides FREE credit score access and educational content with no hidden cost or obligations.
Subscribe to RSS Feed
Compare & Save Money
Blog Search & Categories
- Announcements (3)
- Automobile (7)
- Banking (21)
- Bankruptcy (5)
- Budgeting (28)
- Car (8)
- Career (5)
- College Students and Money (10)
- Credit (69)
- Credit Cards (79)
- Credit Karma (145)
- Credit Report (42)
- Credit Scores (74)
- Credit Union (2)
- Debt (51)
- Economy (73)
- Emergency Funds (5)
- Financial Emergencies (7)
- Functionality (7)
- Guest Blogger (1)
- Housing (52)
- In the News (62)
- Insurance (1)
- Interest Rates (24)
- Investment (6)
- Kids and Money (4)
- Loans (47)
- Marriage (1)
- Mortgage (37)
- Personal Finance (133)
- Portfolio (4)
- Q&A (3)
- Recession (17)
- Retirement (2)
- Reviews (25)
- Roundup (40)
- Shopping (16)
- Stock Market (10)
- Taxes (3)
- Unemployment (4)
- Women and Finance (2)
Most Popular in January, 2009
- Start Improving Your Credit Today
- Your Credit Score
- The Biggest Four Credit Mistakes
- When Bad Interest Happens to Good Customers
- Tax Debt and You
- Is It Time to Refinance?
- Cosigning a Credit Card
- Paying Credit Cards with a Home Equity Loan
- Debt Consolidation for Credit Help
- Identity Thieves are Everywhere
Most Popular All Time
- What is a Good Credit Score?
- How Often Does Your Credit Score Change?
- Homebuilders Offering Big Discounts on Loans
- Chase Sapphire Card Review: A Credit Card For The High Roller In You
- Bad News for the Condo Market
- Public Savings Bank Secured Visa Review
- moneyStrands Review
- How A Credit Card Limit Is Determined
- Begin Saving for Your Retirement
- Weekly Mortgage Roundup June 5, 2009

This is a great site with loads of information! We have definately been seeing score requirements getting tighter! Thanks!
The today show said http://www.helpwithcreditcarddebt.org would provide phone number for creditors …direct numbers to call and speak to csr’s who specialize in helping with problems with paying your bill. I can’t find any of these numbers.