How To Rebuild Your Credit Score In 2019

Knowledge Is Power

For starters, what is your credit score? While it's none of my business, it's certainly all of yours. Those little three (seemingly petty) numbers have the power to determine some of life's most major moments we hope to experience. But if it is worthy of a side eye, then that can definitely be a downer.

The first step in building or improving your credit is actually knowing your score. Sites like Credit Karma do an amazing job of not only giving you your score and entire credit report history as many times as you want it for free (without making your score go down), it also alerts you of any changes that are made. They allow you to learn more about your credit habits and why your score might not be as high as you like. While they offer tips for improvement, the most important factor is that you have to know what your score is to begin with. After that, you can get to work.

Set A Goal

Now that you know your score, what's your goal? Let's be realistic and aware. Be realistic in knowing that your score might not jump up as fast as 1,2,3 (despite what some credit repairing companies tell you), but also be aware of what some companies and lenders look for in a credit score. This will determine how far you need to go so you can set goals that will actually help you measure your success.

The best part is, once you reach your goal, and you certainly will, you can set another. Eventually, you will have not only surpassed it and have a booming credit score that will have companies reaching out to you for business, but you will have mastered smart and disciplined money habits that can positively impact your finances for the rest of your life. Get it, girl!

Pay Off Debt

Once you know your score and set a goal, now is the time to start putting it to work. The first true actionable step is to start paying off debt. While that's obviously a necessity in improving your credit score, it's safe to say that most people really don't know where to start. In reality, a lot of us are asking ourselves how we got in this position to begin with.

Still, there's hope for a turnaround. Most experts say it's best to start with the smaller debts first (i.e. the snowball method). This helps knock off some of those delinquent and collections accounts from your credit report so your score can start growing slowly but surely (although it might take years to see the true results of these actions). Plus, when you start to see accounts make their way off your report, you will build your confidence for the bigger ones so they don't seem as intimidating. By the time you get to the higher ticket accounts, you'll be kicking tail and taking names, asking who's next.

Dispute Anything Incorrect

As you start paying off debt and evaluating your score on the regular, you might realize some things on there that you have no idea where they came from. This actually happened to me and is pretty common. If there's anything on your score that you don't recognize, dispute it. I would recommend contacting the company as well as the credit agency that the item is displayed on (Experian, TransUnion, etc.).

You'll be asked to explain why you are disputing it and if it's really not supposed to be on there, it should get removed from your credit report sooner than later. This might be the smallest item, but you shouldn't have to pay for something you're not responsible for, especially if you're trying to boost your credit; your hard earned money can go elsewhere. This can also lessen some of that time it will take to raise your score to your desired number.

Contact Your Creditors

They might not be as intimidating as they seem. I've had times where I've called my creditors to set up a payment plan and once they realize that I really did have every intention pay, they were really understanding. Even if it's just a few dollars a month, the fact that you're at least trying says a lot. It's a completely different experience from trying to avoid them hoping that maybe their system will crash and they'll lose your record altogether.

Ultimately, your credit score is a number that says how much creditors can trust you. If we're dodging them left and right and getting an attitude about money that we spent and have to back, that's not a good look. You never know, you might have favor with them and they can make moves for you that you didn't think they would.

Keep Those Credit Card Balances On The Low

Life happens, so it makes sense to have a credit card and as a result, credit card debt. Unfortunately, some credit companies have no soul and don't care why credit card debt has skyrocketed. So, it's our job to make sure we keep our balances as low as possible. The ideal amount is below 30 percent. Once you go past that, your score will take a dip baby, dip.

At the same time, please, I'm begging you, don't take out a ton of credit cards to boost your available credit because this will have the exact opposite impact from what you're trying to do.

Another tip with credit cards is to refrain from closing ones that you don't use. The best and most proven way to improve your score when it comes to credit cards is to pay down your debt (if you can, going beyond the minimum amount owed), and keep the balances below 30 percent.

Be Consistent

I'm going to be honest with you. I'm 31 and have had debt since I was 18. I was one of those many people who gave in to the banks and credit unions advertising credit cards on college campuses (they should really be ashamed lol).

But I've learned that even though it can take years to get an amazing credit score you can be proud of, it will happen. As much as we want it to take 30 days, if we're real with ourselves, it didn't take 30 days for us to get to this point. It took years, so it will most likely take years to get out of it. But that's okay. Just be patient, set goals, be consistent, and your credit score will be worth bragging about.