How to Re-establish Credit: 4 Tips to a great score

Bad credit does not have to be a life sentence. Credit history has become an integral part of everyday life, it is just about impossible to avoid.

A major component to rebuilding credit history is to re-establish credit. Re-establishing credit will not only rebuild credit history but also raise your credit scores. Here are 4 ways to re-establish credit and build a new credit history.

1. Catch up on past due bills

Past due accounts will significantly lower credit scores. In fact, one late payment can lower a good credit score by as much as 100 points. If your credit score is poor to fair, a late payment will not lower your score as much 100 points but it will still have an impact. To regain these points you must begin to pay bills on time. Paying bills on time will play a huge part in re-establishing credit. Your ability to successfully manage debt goes a long way in credit scoring.

2. Establish New Credit Habits

New credit habits such as making more than the minimum payment and never missing a payment will help re-establish credit. Conventional wisdom would be to spend only what you can afford but in addition, you should never spend more than 30% of your available credit. Keeping balances low and not maxing out credit cards will help rebuild credit. Replace old credit-destructive habits with new ones.

3. Steer clear of bad credit cards

Consumers seeking to re-establish credit may be tempted by any credit card offer. Don’t let this be you. First Premier Bankcard offers a credit card with a 59.9% interest rate and that is not a typo. Actually it’s been lowered from 79.9%. First Premier starts with a $45 processing fee to open the account, has an annual fee of $30 for the first year and $45 for every subsequent year. In addition, there is a monthly servicing fee of $6.25 (or $75 a year). The typical credit limit is $300 for this card. Default on these types of credit cards is high and are difficult for consumers to close.

A better credit card to re-establish or rebuild credit is the the Orchard Bank® MasterCard®. The reason I recommend and like this card for consumers trying to rebuild credit is that Orchard prequalifies you for the card you will most likely be approved for before an actual hard inquiry is placed on your credit report.

Most credit card companies simply pull your report when you first apply for their credit card which causes a hard inquiry to be placed on your credit report even if you are not qualified to get the card.

Once you see if you are qualified then you can apply for the card you will have the best chance of being approved for. Get pre-qualified right now for your Orchard Bank® MasterCard®.

4. Get New Credit

A low credit score will make it more difficult to get new credit but there are a few options. Be careful not to make too many applications for credit because it will negatively affect your credit score and possibly cause the credit scoring model to view you as a risk.

Orchard Bank® Visa® was voted one of seven best cards for bad credit because of low fees and good rates to consumers trying to build or repair their credit. There is no application fee and no monthly participation fee although there is an annual fee which is not uncommon to most credit cards. Over 2 million consumers have rebuilt their credit with an Orchard Bank credit card.

Another popular credit card to establish credit is the Credit One Bank – Visa®Platinum Card. See if you’re pre-qualified, it’s easy, fast and won’t affect your credit score! It takes less than a minute.

A retail credit card is an alternative choice for re-establishing credit if you cannot get a major credit card. The Fingerhut® retail credit card helps make shopping possible for more consumers through their easy approval credit card and low monthly payments. They carry over 20,000 name-brand products, from electronics to apparel to furniture and best of all, they report monthly to the credit bureaus. There is an easy application online.