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Prepare Yourself for Transition

With the help of a good credit record, you can qualify for the lowest interest rates available in the market and, consequently, save a lot of money in interest payments. If you constantly maintain a bad credit, then you can face problems at the time of purchasing a car, home, or even renting an apartment. But don?t be disheartened! You are not alone. A Freddie Mac study has revealed that about 48% of African Americans have bad credit scores.

Steps You Can Take To Bounce Back From Bad Credit

11 Be Punctual. This good practice can help you a lot if you make on time payments a few months before applying for a loan. Late payments in previous few months will affect your score more than a single case of late payment five years ago.

22. Rectify Mistakes. Before applying for a loan, you should begin reviewing your reports from all three credit bureaus for their correctness. In case of any dispute, you can also use the Crystallized Do-It- Yourself Credit Repair Kit. It has several sample letters to select from. It also offers you some factors considered in your FICO score.

23. Decrease Credit Card Balances. Normally, it?s ideal to maintain your balances at or under 30 percent of your credit limits. This one-third rule will improve your FICO score.

24. Plan Your Budget. It will enable you to determine your expenses and savings. It will also prepare you to purchase a home, because at the time of applying for a mortgage loan, the lender will question you about your income and expenses to calculate your income-to-debt ratio.

25. Get New Credit. If you possess one or two revolving accounts and use them appropriately, then your credit score will increase considerably. Revolving accounts include important credit cards (Visa, Master Card), a jewelry account card or department credit cards (JC Penny?s, Sears). But, you should keep in mind that it is not easy to obtain these credit cards; probably, you will have to begin with a secured credit card by depositing a minimum amount. And, always choose the card with the lowest interest rate. For the jewelry account card, although you have to deposit some cash, but it will initiate the process of your credit repair. As any kind of inquiry will lower your credit score by two points; therefore, you should try to restrict them to a minimum of two every year.

26. Use Credit Cards Properly. These are only for convenience and they do not expand your spending potentials. You should certainly utilize your credit cards instead of cash, but make it a habit to either clear all the balance every month, or pay more than the minimum amount. Moreover, do not utilize your credit card to the maximum. Remember that you are utilizing the credit card to repair your credit, not to damage it further.

27. Open a Bank Account. To promote the growth of good credit, you should have a stable bank account with check and savings facilities because you will get more points for having both. It will also display your money management skills to the creditors. But, try to restrict over drafts.

Finally?

Keep in mind that you did not develop bad credit in a single day, so you need time to repair it. If you adhere to the above-mentioned advice and keep your cool, then you will certainly build a good credit score. Even the present negative marks on your credit card will become redundant after a few years. Only your newly created credit history will matter at that time.