6 tips and tricks on how to rebuild your credit score

Posted on Apr. 04 2022 By: Oneblinc 5 min. read

Most people have a bad credit score at some point in their lives — you might be just starting your financial life, or maybe life happens and your credit takes a hit. Whatever the case may be, it can be difficult to know how to start rebuilding your credit. To help you, we have a few tips and tricks on how to rebuild credit score.

There are undeniable benefits to having a good credit score. If you are looking for ways to rebuild your credit and start clean, this article is for you. ou’ll learn tips and tricks on how to rebuild your credit score, how to fix bad credit, and how to start a positive financial path. 

1. Pay your bills on time 

A late payment can stay on your record for up to 7,5 years. And that definitely takes a toll on your credit history. The way to avoid this is by paying your bills on time. But sometimes emergencies happen and you may miss a payment. If that happens, don’t panic; there’s always a way to fix things. 

If you miss a payment for 30 days or more, negotiate with the creditor immediately and ask them if they will consider no longer reporting the missed payment to the credit bureaus. But remember, the only way to avoid a late payment on your record is paying all your bills on time every month.

2. Keep your credit card balance low

When you use a credit card, the credit card issuer reports it to the credit bureaus. This data is used by the bureaus to make up your credit score, along with all the other information on your credit history. That means that how much you use your credit cards is a factor in determining your credit score.

A good advice is using less than 30% of your limit in any credit card. The same goes if you have a credit line: don’t use up all of your credit limit. Actually, the lower the better for your credit score — consumers with the highest scores use less than 7% of their limit.

3. Keep old accounts open 

The age of your credit accounts takes a big part in building your credit history. The older the credit you have, the more positively you look to lenders because it makes it seem like you are a good borrower who lenders like to keep as a client.

how to rebuild credit

Even if you have an old credit account that you don’t use anymore, it’s a good idea to keep them open. If you close an account and have a balance on others, it will lower your available credit and raise your credit utilization ratio – which makes it go back to the point we talked about in tip #2.

4. Consolidate your debt

If you have multiple outstanding debts — being loans, credit cards, lines of credit, etc — it’s always a smart move to consolidate your debt. That way you’ll have just one debt to pay off, from only one lender and possibly better rates.

Consolidating your debt in one loan is a sure way to rebuild credit. If you have just one debt, even if it’s a big one, your credit utilization ratio is lower. And as we’ve seen before, a lower ratio equals a higher credit score.

5. Limit your requests for new credit 

Applying for new credit multiple times in a short period of time can damage your credit score. If you are asking for loans or credit lines multiple times in a row, institutions can see it as if you’re having a hard time and need money, which would make you a bigger risk for the lender.

6. Add to your credit mix

Adding to your credit mix is a good way to make the bureaus gather more information about your financial history. If you only have credit cards, it might be a  good idea to get a loan – as long as you are able to pay it off in a timely manner. 

If you already have loans and credit cards, you can apply for a new credit card or a credit line. There are a lot of options out there if you want to diversify your credit mix, even if you have bad credit.

Why should I improve my credit score?

When talking about how to rebuild credit score, it’s important to point out the importance of improving your credit history. If you understand the “why”, it’s easier to get into the “how”.

Credit score is a measure of the health of your financial life. It shows if you are a responsible borrower and if you tend to pay your dues in a timely manner. Most of all, the importance of your credit score is making lenders more confident and comfortable in lending you money.

Even though these tips are a proven way to rebuild your credit score, they are not an easy and fast fix. When talking about improving your credit history, it’s about more than just how to fix your credit fast. It’s about taking control of your financial life, establishing positive habits, and making it reflect on your credit history.

But what can I do while waiting for my credit to improve?

Now that you know why it’s important to maintain a good credit score and how to rebuild one, it’s time to face the reality of your credit history. If you are looking to learn how to improve your credit score, chances are your credit score took a hit at some point. So what can you do until it improves?

Your credit score aims to paint a reasonably accurate picture of your credit history and it’s one of the ways a lender can assess your ability to repay a loan. But it’s not an “end all, be all” way to understand who you are. There are other ways to paint an even more accurate picture of your financial life. 

At OneBlinc we use our own risk assessment algorithm and alternative data to make our own credit decisions that give us a sharper picture of your financial history and your ability to repay a loan. And if you don’t know where to start, we have a team of experts dedicated to help you find the best option for your financial needs.

About us

Unexpected things happen more often than we would like them to. That’s why OneBlinc is here to help, whether you have an emergency or just need that extra cash to go through the end of the month. We believe in people, and we understand that everyone might need money someday, somehow.