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Financial Topics & Tips

How to Rebuild your Credit

When you experience a financial challenge, your credit record could suffer. Rebuilding it takes time. There are no shortcuts or secrets. But the steps below can help.

1. Pay your bills on time, every time

“On time” means the payment got to the company by the day the bill is due. Mail your bills a few days before they’re due.  Automatic payments from your bank can be a good way to make sure your bills get paid on time. Keep track of automatic payments so you know you have enough money in your account to cover them.

2. Don’t get too close to your credit limit

Credit scores consider how close you are to being “maxed out” on credit cards. If you use too much of your total credit lines, you can hurt your credit score. Experts advise using no more than 30 percent of your total credit limit – some even say you should use less than 10 percent.

3. Don’t apply for too much credit in a short time

Your credit score may go down if you apply for or open a lot of new accounts in a short time. This includes getting a new card so you can transfer balances, or opening a new store card account so you can get a discount.

4. If you pay with a credit card, pay your balance off every month

You’ll build credit by using your credit card and paying on time, every time. Pay off your balances in full each month to avoid paying finance charges. Paying off your balance each month can also build better credit than carrying a balance. Think about signing up for text alerts and automatic payments to make sure you don’t pay late or miss a payment.

5. Keep it up

Credit scores are partly based on experience over time. The longer you have credit and pay on time, the more information there is to show you’re a good credit risk.

6. Check your credit reports and fix errors right away

Credit scores are partly based on experience over time. The longer you have credit and pay on time, the more information there is to show you’re a good credit risk.  You can get a free copy of each of your credit reports from the three nationwide credit reporting companies every year at

You may find incorrect information that is bringing your score down. If you do, file a dispute with the credit reporting company.

Be Aware:  These four things DON'T help rebuild your credit
1.  Using a debit card or paying cash. These transactions don’t help you prove you can repay debts.
2.  Using a prepaid card. A prepaid card is your own money, loaded on to the card in advance.
3.  Taking out a payday loan. Even making on-time repayments might not help your credit.
4.  Taking an auto loan from a “buy here, pay here” car lot, unless they promise
     in writing to report your on-time payments.

How long does negative information stay on my credit report?
Bankruptcy for 10 years
Foreclosure for 7 years
Lawsuits and judgments for 7 years or longer

TTCU has partnered with Greenpath Financial Wellness program.  Greenpath counselors provide confidential assistance with personal and family budgeting, understanding your credit report and how to improve your score, money management, debt management and debt repayment plans and more! This program is complimentary to TTCU members.  Click here to learn more or call toll-free 877-337-3399.

The above article is provided by the U.S. Consumer Financial Protection Bureau – learn more at