It is possible to rebuild credit in spite of past credit difficulties. There are basically two ways to approach the task. You can get help from a variety of legal and financial groups that specialize in this type of work, or you can do it yourself.

If you are uncertain that it is something you want to tackle on your own check your local phone directory for Credit Counseling types of agencies. Check for qualifications that you recognize as reliable. Be aware that this type of help will involve fees for their service, so make sure you find out exactly what your costs will be before you commit to anything.

However, it is not impossible to rebuild credit on your own. The first thing you will need to do is get organized and create a plan of action. Here are the basic steps to take to rebuild your credit.

1. Obtain a copy of your credit score. Check it for errors and if you do find something you think is wrong, be sure to get that corrected first. There should be information on the report itself that will explain how to handle disputes.

2. Get up to date on any overdue accounts and make them current so that they don’t get sent to collections. Talk to your creditors and make arrangements for this in order to keep them from affecting your credit score.

3. The next step is to try and bring your maxed out credit cards down so that they are under their limit. Make regular minimum payments to keep them current and below their maximum.

4. Apply for a new credit card. It will likely be hard to obtain a major credit card but you may be able to get a department store card or another smaller credit card. Be sure to apply only once. Only get a small credit limit on this card and stay within it. Pay it regularly and you will begin to rebuild credit.

5. Finally, now that you are on track, draw up a budget that will allow you to stay on top of all your credit card payments and stick with it. It is not easy to rebuild credit, but it can be done!

Even though mortgage rates these days are incredibly low, many people are missing the chance to take full advantage of it. Why? Because they don’t have an acceptable credit score for mortgages. So what kind of score do you need to get the mortgage you want?

That tiny little three-digit number means a whole lot to those who lend money. It shows them how credit worthy you are and until recently, a FICO score of 720 meant you could lock down great rates and terms for loans and mortgages.

Unfortunately, with the banks in crisis, lenders are looking for a credit score up around 740 before they are willing to offer great rates. That doesn’t mean you’re out of luck if you’re score is slightly lower. It just means your rates will be higher. Unless you have a score below 580, you should still be able to get the loan or mortgage you need.

In the United States, the average credit score is a healthy 720 according to the company that developed the FICO scale. That means 50 percent of people have a score higher than 720 and the other 50 percent score lower. The scale ranges from 300 (worst score) to 850 being the perfect score.

Having a decent credit score is important for more than just mortgages. It is used by insurance companies to determine your premiums, landlords, and some employers.

If you need to raise your credit score here are a few simple tips to remember:

Keep an eye on your credit report – errors on your report can damage your credit.

Apply for a credit card and use it wisely – pay off the balance and avoid interest charges.

Set up your accounts for automatic payment – keeps payments on time every month.

Keep your finances out of collections – this can be devastating for credit score.

Don’t use all your available credit – lenders like to see a difference between what you have access to and what you use.

Use less than 30 percent of your available credit – under 10 percent is even better!

Follow these tips for lowering your score and you can get it above 720 in no time!