Three years ago, you suddenly stopped paying your telco postpaid line. You did not call the company’s customer service to ask for formal termination. You also did not bother to pay all the remaining charges. Today, you applied for a credit card online and through agents and all applications were denied. One thing’s for sure, the bank was able to trace your unsettled telco balances and tagged you as high-risk borrower not worthy of a credit opportunity. 
Does this close your chances? Not at all. Bad debts in the past can have a significant toll on your credit score, but this doesn’t mean you have no hopes at all. You can still have your credit profile recover and raise your credit score. 

Patch things up

Whether problematic credit scores come from bad debts and the most logical solution is to pay them off. Reconnect with all the lending institutions in which you have left unsettled accounts. Either you can visit their offices or call their customer service hotline for inquiries. Ask for debt repayment schemes which they offer. Some companies may not agree with reducing the amounts incurred but may opt for easy payment strategies. A few banks may also suggest reduced settlement amount as long as you can pay within a specific time frame. 
Check for arrangements that work best for you. You may need time to produce enough money for repayments, but at least you already have started a clear plan. 
During this stage, you can also dispute all charges and report errors. Spend time evaluating the lender’s fees. It will also help if you can recall all payment receipts you’ve made in the past to counter check with your lender’s records. 

bad credit

Don’t make the same mistake twice

You already know what happens to your credit score when you fail to pay. Delinquencies are harmful to your credit profile. Don’t make the same mistake twice by consistently paying your dues on time. If you have existing loans and credit card balances, make sure that you settled them on or before the due date. Paying in full can improve your reputation. It will give lenders a positive impression on how well you fulfill your financial obligations. Should there be times when you can’t meet the due date, don’t hesitate to call the lender and ask for consideration. 
Keep all documents related to your loans and credit card usage for future references. These paper trails can help you dispute any error or wrong postings which your lender may make. 

Move forward, apply for new credit

This stage might seem to be the most difficult of all. One of the reasons is that lenders can decline your application without telling you the reason. You will end up wondering what went wrong. Although multiple applications can be a red flag for banks, you can keep trying until you nail one. 
Applying for a secured credit card or personal loan is usually the best options for those who want to rebuild their credit. Secured credit lines require collateral either in the form of a deposit account or a guarantee. The good thing about secured lending is that your chances of getting approved will be higher. Some customers look for payday loans that allow starting anew. They borrow even with a higher interest and pay off the loan within a few months. This strategy can cost you a little more, but if it means jumpstarting your credit line, it is definitely worth the try. 

new credit

Be patient

It may take a second to ruin your credit profile, but it will take months to years before you can rebuild them. The catch is your delinquencies have destroyed the trust that lenders gave you before. It takes time to earn it back. While waiting, you need to prove to them that you are now a responsible borrower. Keep paying your bills on time and make sure you do not borrow more than what your earnings can pay. Once you’re approved for new credit, make sure you don’t ruin the trust again. 

Credit repair timeline

1-3 months
Expect this period to be hard. This is the time when you need to gather all your strengths in facing the truth. Money borrowed should be paid. The first three months of your credit repair journey will be spent checking for unpaid balances, debts that have reached collections agencies and getting in touch with your lenders again. It is also during this time that you need to find other sources of income so that you have enough to settle unpaid balances. 
4-12 months
During this period, you might already have a payment strategy to close off your bad debts. Opt for proper ways to manage your finances. Again, having more than one source of income will help you succeed in this debt-payment journey. You can refrain from incurring new borrowings at this time, but you can try your luck in applying for credit cards once in a while. 

credit card

12-24 months
If you’re on the right track, your delinquencies may have been reduced in a year. Your credit profile would begin to see some better scores. At this point, you should be confident enough to apply for personal loans and credit cards. Once approved, make sure that you show lenders you’re a responsible borrower. Always stick to your budget and payment plan.
Three years onwards

You already recovered from debt nightmares. You should have settled everything that contributed to your low credit scores. By this time, you should own at least three different credit cards, and you already have rebuilt the lenders’ trust. 

You need to take that long and winding road to credit repair. It is never easy as it may sound but there is always hope for those who know what to do to manage their finances. A bad credit reputation is repairable. Good money management, discipline, patience and resourcefulness, and key traits you need to have to win the lenders' trust back. 

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