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Bad credit puts you in a difficult situation when it comes time to rent, buy a car or home, start a new job or qualify for a loan. If you can qualify for a loan with poor credit, you may have to settle for less-than-desirable terms.

Rebuilding your credit may feel like a daunting task, but there are several steps you can take today to get on the right path. Here are a few steps you can take today.

Check your credit report

If you want to improve your credit report, you must know where you stand with creditors. Your credit report will show you where you need to improve, how much you owe and which accounts are behind. You are entitled to a free credit report each year from each of the 3 credit bureaus. Pulling your credit here will not affect your credit score. Visit for your
free reports.

Catch up on your payments

Payment history is the largest factor affecting your credit score. Your score plummets when you get behind on your payments. Try to bring your accounts up to date and maintain minimum
monthly payments.

If you are far behind and cannot afford to bring your accounts up to date, contact your creditors and try to establish a payment plan. Explain your situation and let them know you are working hard to fulfill your obligation. Let them know how much you can afford to pay each month. It may surprise you how willing they will be to work with you.

Don’t skip payments going forward

Do what you can to pay your bills on time, every time. This applies to non-credit bills too. Late utility payments and rent payments might be reported to the credit bureaus. Payment history is important, so establishing a reliable pattern is essential to rebuilding your credit.

Avoid closing credit card accounts

Avoid closing your accounts when possible. The longer your history, the better your credit score. If you are far behind and have to start a payment plan, you may have to cancel your card. Do what you can to at least keep your oldest accounts. By keeping your older accounts, you will show a substantial credit history.

Stop forming bad financial habits

It can take 60 to 90 days for you to see an improvement in your score. Depending on the severity of your situation, it can take as much as two to three years to see a significant improvement. Reduce the chances of poor credit in the future by changing your financial habits.

Try to live within a budget, set aside emergency funds and save for the future. You will be less inclined to skip payments, and you will have something to fall back on if you have a financial emergency. Maintain the good habits you form while rebuilding your credit and it will be easier to keep a better history.

Consider debt consolidation

Debt consolidation is a way to refinance what you owe. When you secure a debt consolidation loan, you pay one bill on your combined debt. This simplifies your finances and often offers a lower interest rate. Visit your nearest FirstBank Southwest location or call us at 806.355.9661 to learn more.

FirstBank Southwest (“FBSW”) was founded in 1907 and family owned since 1934. FirstBank Southwest is a dynamic 1.6B+ regional bank that has the privilege of serving the families and businesses of the Texas Panhandle, DFW Metroplex, and Austin and San Antonio metro markets. It is the mission of FBSW to be the preferred community bank in the great state of Texas by providing focused financial services for commercial customers and retail customers. Get social with us on Facebook, Instagram, LinkedIn and Twitter. Visit us on our webpage at:

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