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How to rebuild your credit score after money problems

Credit scores are a vital part of determining access to rental properties, financing and even insurance. Employers often run credit checks during the hiring process as well. Facing financial challenges can lead to poor credit score, which can interfere with your access to many services.

There are some ways to improve your credit following financial challenges.

Settle any collections

Pay any collection balances that appear on your credit report. Reach out to the collection agency and negotiate to pay in full in exchange for removal if possible. That eliminates the collection account from your credit report. Make sure you get the agreement in writing before making that payment.

Dispute reporting errors

Credit reporting agencies are fallible and mistakes occur in reporting. Review each account on your credit reports for accuracy. File a dispute for anything incorrect, including account status, balance, payment history and account ownership. Monitor your accounts regularly for accuracy.

Get a secured credit card

Rebuilding a negative credit score starts with making timely payments and using your credit responsibly. Establishing this history is a challenge when you already have poor credit. A secured credit card is more accessible for those with credit struggles. Use the card sparingly, keeping the balance under a third of your available credit. Make your payments every month on time.

Rebuilding your credit score requires patience and persistence. With timely payments, attention to detail and responsible credit usage, you can improve your credit history. This makes it easier to get better rates on insurance, secure a loan or get a rental.


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