How to Re-Enter the Credit Markets

Lots of people’s FICO scores crashed and burned during the recession. However, credit is still available to them in the form of secured credit cards and online payday loans. If you eventually hope to rebuild your credit history enough to one day get a mortgage or finance a car loan, then it’s time to take advantage of as many possible routes to FICO health as possible.

Pay Your Bills on Time

One of the first items on your checklist is to get into a stable situation where your income exceeds your expenses. If you suffered a foreclosure and were smart enough to plan ahead and seek out an affordable apartment before the foreclosure showed up in your credit history, you will be one step ahead of the game. Not only will you have reduced your living expenses to match your income better, but you will have a record of good rental payments that if made on time can help to build your credit history again.

Look for short-term Loans

Another way to rebuild credit after a bankruptcy or foreclosure is to actively seek out short-term loans that you can easily repay. This serves two purposes. It shows that someone is still willing to lend to you and it also shows your repayment history. Payday loans are good ways to rebuild a credit history because they don’t require a credit check, but the repayment is still reported to the credit bureaus. When no one else is willing to lend to you, and you have a job, a payday loan may be one of the few resources you have left to rebuild the credit score after a major financial disaster. Also check out secured credit cards, but they require that you have the money to load into the credit card to loan it back to yourself. This is good for rebuilding credit but is not a real loan, like a payday loan.

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