Steps to rebuild your credit score after missing credit card payments
Did you miss a credit card payment? Here are steps to rebuild your credit score and get back on track after missing payments.
Be Patient With the Process
The first thing to know about rebuilding your credit is that the process could take months or even years. The time it will take to repair your credit depends on the severity of the late payments.
Contact Your Card Provider
Being proactive is key.
- Start by contacting your credit card provider.
- Explain your financial situation to them.
- Ask about any available financial assistance plans that you could use.
Chances are, they’ll be willing to work with you. You never know if you don’t ask.
Tighten Up Your Budget
Missing credit card payments consistently may be a symptom of a larger financial problem.
- Review your budget
- Make cuts where you can.
- Use those extra funds to make your late payments.
- Commit to staying on top of future payments.
Stay Current
This might sound obvious, but a key to rebuilding your credit after missing payments is to not miss any future payments.
- Be diligent about never being late again.
- Consider setting up an automatic minimum payment if you are able.
- If reminders help, set them up to remind you of your payment date.
Keep Utilization in Mind
Another big factor in your credit score is your utilization. This is the percentage of your available credit that you’re using out of the total credit available.
- Keep the percentage as low as possible (aim not to exceed 30%), and slowly (but surely,) your credit score will begin to improve.
Monitor Your Report
While you’re busy making timely payments, remember to monitor your credit report.
- Get a free copy of your credit report.
- Make sure there are no errors.
- Report any errors you see to the credit bureaus.
You don’t want incorrect info to keep your credit score down.
Original article by Chris O'Shea and adapted in partnership with SavvyMoney.