Whether you want to buy a home, get a student loan, apply for a credit card, or even apply for a new job, having solid credit is important.
Simple choices, like paying bills on time and diversifying your accounts, can help you rebuild your credit no matter what shape it’s in. In particular, a secured credit card can help rebuild your credit with responsible use.
Follow these steps to get back on track.
How to Help Rebuild Your Credit
Key points about: rebuilding credit
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Rebuilding credit takes time and there’s no set time period to rebuild your credit, as there are many factors to consider.
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Usually, the first step to rebuild credit is to request your credit report and assess your credit history.
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Making on-time payments is one of the most important factors in rebuilding credit.
5 steps to rebuild your credit
High credit utilization ratios may have a negative impact on your credit score. You might consider the goal to have under 25% utilization on every line of credit in your name. If one of your credit lines has a 90% utilization rate and others are much lower, you could focus on paying down the one with a high utilization rate first (assuming all lines have a similar interest rate).
Once you’ve gotten a handle on responsible spending habits and given your credit score a boost, consider diversifying your credit accounts. Switch or “graduate” from a secured to an unsecured credit card, or apply for a new type of credit, like a car loan, if you need one. Demonstrating your ability to manage different types of credit can help you rebuild your credit. That said, avoid opening multiple lines of credit all at the same time. Each time you apply for a line of credit, it creates a “new credit inquiry” on your credit file, and too many of these in a short period can have a negative impact. Keep this in mind, for example, if in a short period of time you want to open multiple store credit cards at places you shop frequently. responsible use1
How to rebuild credit with responsible use1 of the Discover it® Secured Credit Card
Adding a new line of credit can help you rebuild your credit history. Using the Discover pre-qualification application can let you see pre-approval offers you may qualify for without affecting your credit score.2
Did you know?
If you prefer the ease of using a secured credit card, you can apply directly for the Discover it® Secured Card. If you can make on-time payments with a secured credit card, you can build credit with responsible use.1 Unlike some secured credit cards, the Discover it® Secured Card allows you to earn cash back rewards from every purchase you make on the card.
See if you're pre-approved
With no harm to your credit score2
How long does it take to rebuild credit?
There's no set period of time that it takes to rebuild your credit, as various factors contribute to your credit history.
If you’re able to review your free credit report and identify any errors made by the credit bureau, reporting those errors to the credit bureau to correct them may impact your credit history.
If you’ve been a victim of identity theft or fraud, you may find that fraudulent charges (and non-payment of those charges) are the problem with your credit history. Resolving fraudulent charges with both your credit card issuer and the credit bureau that is showing the erroneous charge can help them get removed from your credit report.
Rebuilding your credit takes time and dedication. Whatever your situation, the best time to start working on building good credit is now. By focusing on establishing a reliable history of on-time payments or by using new credit cards to increase your credit mix, you can take the steps to rebuild your credit and make your financial goals a reality.
Next steps
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Build credit with responsible use(Secured): Discover reports your credit history to the three major credit bureaus so it can help build/rebuild your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build/rebuild credit.
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There is no hard inquiry to your credit report to check if you’re pre-approved. If you’re pre-approved, and you move forward with submitting an application for the credit card, it will result in a hard inquiry which may impact your credit score. Receiving a pre-approval offer does not guarantee approval. Applicants applying without a social security number are not eligible to receive pre-approval offers. Card applicants cannot be pre-approved for the NHL Discover Card.
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Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.