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Spring Cleaning Your Social Media.

Aliza Sherman is a new media entrepreneur, author, women's issues activist, and international speaker.

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In Business, Clouds Have Silver Linings

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How to Rebuild Your Credit

How to Rebuild Your Credit

Sometimes it can be more difficult to rebuild credit than building it from scratch, which is why you want to avoid getting into credit trouble ever again. The same five scoring factors that apply to building credit also apply to rebuilding credit – solid payment history, debt-to-credit-limit ration, length of credit history, new credit and credit mix. People who have experienced credit problems may find it equally difficult as people without credit to obtain it. But, there are some things you can do get the ball rolling:

Review your credit report: Before you can repair your credit, you will need to know exactly what is wrong with it. Your credit report will tell you everything you need to know, but you need to know what to look for.

More often than not negative information is reported erroneously. Carefully review your payment history to see if there are any glaring omissions. It’s also common for credit limits to be reported incorrectly which can hurt your debt ratio. Look for accounts that don’t belong to you. Names get crossed in the data base, and sometimes are pulled in accidently. Be sure only your legal names are listed.

To correct any errors, your first call should be to the credit bureaus. They are required by law to correct errors immediately.

Open a secured credit card account: These are accounts are similar to credit cards except that your credit is based on a savings deposit which is committed to securing your credit. For example, a deposit of $500 will get you a $500 credit limit. They still charge interest and fees, just like a credit card. It is vital, however, that you make sure that the creditor does report your payments to the credit bureau.

Use your credit: If you do have a credit card, or are able to obtain a loan, use your credit often and always pay the full balance each month. Remember, your payment history is the biggest factor in scoring.

Be careful with inquiries: You may need to apply a few times for credit, but you should refrain from doing so more than a few times in any six month period. Too many inquiries can drag your score down.

Monitor your credit: When your credit is fragile, the smallest credit activity can impact your score. You need to make sure your activities are leading it in the right direction. You should order your three free credit reports at different times over the course of the year so you can check your progress. Alternatively, you can subscribe to a credit monitoring service which can provide you with weekly and monthly updates on your activities. They will compile all of the information from all three credit bureaus into one report. The service typically costs about $10 to $15 per month depending on the frequency of their reporting.

Don’t close inactive accounts: Remember your debt-to-credit-limit ratio. If you close a credit card account that you haven’t used in a while, it will lower your overall credit limit which will increase your debt ration. Keep accounts open, and use them once in a while so the creditor doesn’t close it for inactivity.