Make payments on time.
Even as you’re tackling existing debt, make sure you don’t add on to it by missing credit card and loan payments. If you’re not certain that you’ll be able to make a minimum payment by the deadline, contact your creditors ahead of time and explain your situation. Give them an estimate of when you’ll be able to repay your debt. If you let your creditors know in advance rather than seemingly skipping a payment, you’ll be demonstrating responsibility and credibility. Creditors may be more likely to trust that you’ll pay them back.
Once you’re on the right track again, be sure to create an emergency fund to deal with difficult, unforeseen financial situations. Creating an emergency fund with three to six months of living expenses will enable you to cover many of the unexpected expenses you may face. Learn more about emergency funds.
Confirm that your financial activity is reported to the three major credit bureaus – Equifax, Experian and TransUnion – to be sure that your repayments are positively affecting your credit score.