How can you re-build your credit?
*Pay all bills in a full and timely manner -- especially rents and mortgages. If you've remained in your present apartment for a few years and have never failed to turn in your rent on the first day of each month, that's a point in your favor.
*A strong employment history, too, bodes well for you. Remaining with the same field with a record of income growth is certainly to your advantage.
*If you can evolve long-term relationships with creditors that can help establish a positive perception.
*Your credit report may be missing vital data as your home address, your telephone number and your date of birth -- or it could have you confused with someone else. Read your report thoroughly, and address any missing or incorrect items as soon as possible.
http://www.nolo.com an online resource both for renters and buyers, offers various tips regarding how to restore your credit. According to the site, the average time required to rebuild one's credit to the point at which you can be accepted for a major credit card or loan is approximately two years.
Rebuilding your credit in order to obtain a mortgage is another matter. The average period required to reach that point, according to Nolo.com, is four years.
However, there's no penalty to speaking with lenders and trying to obtain credit approval faster. Lenders will want to look at the individual facts and circumstances associated with your situation -- did you have a generally good credit history in the past? Was there an event beyond your control which result in financial problems, such as medical bills, a car wreck or a company downsizing? After your credit problems, have you been re-building?
To re-build credit, start small -- perhaps a gasoline credit card or one for a department store. Pay fast and completely as the bills come in. Build up credit lines and credit histories.
Limit yourself to two or three major cards. It's actually advisable to keep two cards if you can because you're diversifying your credit history while further proving your ability to pay off debt.
By all means, however, you don't want to start stuffing your wallet with major credit cards. First of all, the obvious reason: It's much too tempting to overuse them; and second, using too many cards could raise yet another red flag at precisely the time when you want to avoid any more questions in your credit history. Limit yourself -- you can stick to one major "all-purpose" card, along with one department store card then add a bank card and one gasoline card if you'd like. Don't feel obligated to use them frequently just because you have them in your wallet. Use them on occasion. Then make your payments in full and on time so as to avoid interest charges.
Should your application be rejected for any reason, you should consider a couple of options. Some credit card companies offer consumers a card provided they deposit a sum of money into a savings account. Consumers are then issued a card with a credit limit equal to the sum in the savings account. You may also wish to consider finding a co-signer for a major credit card. Quicken.com warns consumers of high-priced "fix your credit quickly" clinics that promise (in 60 days, for example) that promise financial redemption in exchange for a fee. "Although some consumers pay credit clinics hundreds or even thousands of dollars to 'fix' their credit reports, only time can improve bad credit," the site advises. "The key fact: There is nothing a credit repair clinic can legally do to fix a credit report that you can't do yourself for free."
Rebuilding your credit requires time, patience and vigilance, but the rewards -- most namely, homeownership and equity -- are great. For more tips on rebuilding your credit rating in preparation for homeownership, take a look at the following sites:
http://juliaswiki.net/credit_score.html
http://homebuying.about.com/cs/yourcredi...
http://www.oskie.com/credit-bureau-tips....
http://www.ftc.gov/bcp/conline/pubs/cred...
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