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How to Rebuild your Credit in 4 Simple Steps

The first step in rebuilding your credit score is understanding what your credit score means for you. Your credit score is a three-digit number that informs creditors and lenders just how likely you are to pay your bills on time. The goal is to have a high score, this way you are more likely to qualify for loans and credit cards on your own timeline. Unfortunately, sometimes life can throw you curve balls and you may have had to use your credit card more often than you wished you did, or you may have found yourself falling behind on your payments. If you are looking to repair and improve your credit score, here are 4 simple steps to help get you started.

1. Pay your bills on time

It all starts with you and your bills. Paying your bills on time should be the first step you take to get your credit score back on track. Looking into any past-due accounts and making sure you pay what is due will put you in a position to start looking forward. Helpful tip: Setting up bill pay or payment reminders when bills are due will help you stay organized.

2. Pay off debt and keep balances low on your credit cards

Debt can cause a lot of stress, and it definitely does not help your credit score. Taking control of your finances with budget tools can help organize your money and help you outline a plan on how to handle your debt. A debt management plan encourages you to deposit money each month in order to lessen the outstanding bills. Steer away from picking up your credit card in these types of situations, only buy what you can afford so you can manage the debt instead of adding to it.

3. Understand your credit limit

Each credit card will have a limit – “credit utilization” is the percentage of your credit limit you are using. Experts say to only use 30% of your limit, this helps keep your credit score at a lower number. Check out your credit utilization scores for each of your cards and try to focus on bringing down the highest one. The best part about your credit utilization score is once you bring it down, past numbers don’t have an effect on your credit score balance.

4. Start using your debit card

There are other ways to pay for things, try to stop reaching for your credit card every time you need to purchase something. Radius offers their clients a rewards debit card, that way you can experience benefits without having to worry about your credit score dropping. Get cash back on online and signature-based “credit” transactions made with a Radius debit card and save up to $300 this year with ATM rebates.1,2

Don’t be discouraged if you are faced with a low credit score, the sooner you start working towards repairing your score the faster you will become better off financially.

1 The Debit Card Rewards Program (Cash Back Rewards) will provide 1.00% cash-back on all Qualified Purchases made by eligible Rewards Checking account holders if the account holder does any of the following; meet the requirements, is grandfathered in, or keeps an average balance of $2,500 or greater within the calendar month in their Rewards Checking Account, or receives total deposits of $2,500 or more in their Rewards Checking account via qualifying Direct Deposit within the month. Qualifying Direct Deposits are Automated Clearing House (ACH) credits, which may include payroll, pension or government payments (such as Social Security) by your employer, or an outside agency. Radius Bank may require documentation to verify that credits are Qualifying Direct Deposits. The value of this reward may constitute taxable income to you. You may be issued an Internal Revenue Service Form 1099 (or other appropriate form) to you that reflects the value of such reward. Please consult your tax adviser, as Radius Bank does not provide tax advice. Qualified Purchases include signature-based purchases made with a Radius Bank Debit Card tied to a Rewards Checking account enrolled in the Debit Card Rewards program. These are “credit” purchases that can be made in stores and online. To make a signature-based purchase, select “credit” rather than debit at point-of-sale kiosks. The “credit” option is most often pre-selected when making purchases online using a debit card. Online subscription payments may not be considered signature-based purchases. The payment transaction type (signature-based or other) is ultimately decided by the merchant and how the transaction is transmitted to Radius Bank at the time of processing. We reserve the right to determine if a transaction was a Qualified Purchase, and to establish additional types of Qualified Purchases that could be made available in a variety of ways. Any goods or services purchased with the Radius Bank Debit Card that are returned or otherwise credited to your Account are not qualified purchases. Unlawful purchases and purchases of currency, cash or cash equivalents (including, without limitation, currency from the U.S. Mint, Travelers Cheques, gift cards, Cryptocurrency, Casino Chips, Peer to Peer Payments, prepaid debit cards, account openings, loan payments, or other cash equivalents) made with your Radius Bank Debit Card are not Qualified Purchases. We may require you to provide documentation to validate that certain purchases are Qualified Purchases. Radius Bank reserves the right to modify or discontinue this program at any time. Your enrolled account must remain open, active, and in good standing to participate in the program, meaning: No NSF (non-sufficient funds) items during the preceding twelve calendar months in your checking account (regardless of the type of checking account). An eFunds check must show no negative history in the preceding twelve months and all monthly servicing fees must have been paid in full for the 12 preceding months. Radius Bank reserves the right to modify the description of “good standing” at any time. If you or the Bank closes your account for any reason before the end of the statement cycle, you will forfeit all rewards accrued through your linked Debit Card during that statement cycle.

2 For a limited time, an additional 0.50% bonus on transactions made in certain merchant categories will apply. Transactions must be within the following dates to qualify for a bonus: April 1, 2020 to December 30, 2020. Only specified categories will receive a bonus. Categories receiving the bonus are: drug stores and pharmacies, medical services and health practitioners, misc. food stores, convenience stores, specialty markets, fast food restaurants, eating places and restaurants, grocery stores supermarkets, cable and other pay television (previously cable services), computer software stores, book stores, charitable and social service organizations. These categories are determined by the merchant, not by Radius bank. All additional requirements of the Debit Card Rewards program apply. 

About the author

Eileen Flynn

As the Social Media and Public Relations Coordinator at Radius Bank, Eileen has grown up with the online and mobile banking industry. Eileen writes for other generation Zers and recent college graduates who are balancing both saving and spending and explains how online and mobile banking is there to help.