Rebuilding the credit can be difficult than beginning from scratch. You are trying to show lenders and credit card issuers that despite slip-ups on your part/disasters you had nothing to do with, you are probably to make future payments as agreed. Before you start to rebuild credit, it is important to know where is your starting point.

Your credit score cannot be as bad as you think. You can receive a free credit score from NerdWallet, and track it. Once you know where you stand, you may start to set some small, achievable goals for yourself. Consider these basic tips to rebuild credit:

Pay on time

Pay bills on time if you can. Paying the minimum is better if that is all you can manage. If you see it isn’t possible to pay at least minimums, contact your creditor to see if other arrangements can be made, minimum for now. Your payment history is the single factor affecting your credit score. When you’re rebuilding credit, you can’t afford to have a payment reported as late.

Get a secured credit card

This product is usually for people who want for building credit from scratch. If your credit card accounts are closed, you can need to begin over with a secured credit card.

These cards need a deposit upfront. That deposit is your credit limit, but then they work like any other credit card. Select one from an issuer that reports payments to all 3 major credit-reporting bureaus.

Get a credit-builder loan or secured loan

As the name recommends, a credit-builder loan has one purpose: to improve your credit profile. You are most probably to find one at a credit union or community bank.

You will need to be a member or client, and you will have to show proof of income and capability to repay. The lender holds onto the money as you repay, then releases it to you once you have completely repaid the loan.

Pay down credit card balances

Take charge of the credit cards by paying down their balances. If you have any outstanding balances, prepare room in your budget to pay down these debts bit by bit, monthly unless they’re gone. Know the credit limits and make all efforts to stay under the maximum when charging items.

Don’t use too much credit

The 2nd big component of your credit score is how much of your available credit you utilize. The goal must be to use less than 30 percent. That means if you have a $1,000 card, do not have more than $300 worth of charges on it.

Pay Your Debts on Time, Every Time

It’s definitely crucial that any monthly payments on credit cards or other debt are paid on time. Payment history is the single most essential factor in the FICO formula, accounting for 35 percent of the overall score. A late payment, furthermore, remains on your credit history for 7 years.

Now there is a good way you can use positive payment info to increase your credit score. The good part is it is free. When you sign up for Experian Boost™, the monthly payments involving utility bills and mobile phone bills can be tracked to see if you make the payment on time. When you do, this information is used to give your FICO® Score a boost.

Understand Your Risk Factors

When you appeal the free credit reports from AnnualCreditReport.com, you get the report. You do not see the usual credit scores. But for those who want to importantly increase their scores, buying a full credit report with scores can be beneficial. Experian, TransUnion, and Equifax involve a list of risk factors along with purchased scores.

Your credit score takes into consideration as many as 300 risk factors and knowing what the risk factors are will let you know where you can make improvements. The risk factors can list a certain account that’s hurting your score or too many credit card applications in a short period. Even if you don’t have a mortgage, still it can show up as a risk factor. You will not be able to fix everything do not purchase a home to increase your credit score but you may spot some factors you can change.