Tips To Raise Your Credit Score
Credit recovery is something that millions of Americans have tried to do for the past three and a half years. Life happens! Things are not always so peachy for us, financially speaking, and at some point, we find ourselves trying to pick up the pieces. Sometimes it might be because of a layoff, death in family, divorce, illness, our own bad choices, and/or any other unforeseen event thrown in our path.
The past is the past and it does not matter how we got to where we are now. What matters is if we learned the lesson and if we can pick ourselves up and brush off the dirt and blood (figuratively speaking). Financially, credit recovery is a simple but slow process. The following are some strategies that you can do on your own and be able to watch your credit score rise.
Current Credit Cards
If you still have a credit card, you do not need to go out and get a new one. Just use what you have. If your credit card is already maxed out, pay at least the minimum every month and try to pay a little more throughout the month. This will show the credit bureaus that you are making on time monthly payments and before you know it, the credit balance will start to disappear.
Credit recovery is like dieting and weight loss….you did not gain the weight overnight and you will not lose the weight overnight. Our Credit score is the same. It will take time, self-discipline, and determination and within a few months time you will see some encouraging results.
Some things you can do to recover your credit score is to pay down and off your current debt on time and increase your liquid assets. If you are not feeding your savings accounts now, you need to start, even if its $25 a month anything is better than nothing. As your liquid assets increase, the credit bureaus and lending companies will not see you a risk to them. Your fico score will rise just by following those two main steps – pay down debt and increase your savings.
Obtain New Credit
This one is a very hard thing to do, especially after a bankruptcy or severe defaults on credit. Credit Cards can be a four-letter word to people especially after filing a bankruptcy. The truth is, credit cards can be your best friend or your worst enemy! It just depends on you. Credit bureaus (i.e. Experian, TransUnion, and Equifax) like to see that you are making your payments on time, if not in full every month. Self-discipline is essential; it does not matter if you spend $.99 on a pack of gum or $1,500 on a HDTV. You need to create a new track record that will prove to credit agencies that you are trustworthy and responsible. A new credit card is a good start for you to do that.
Types of Credit Cards Available to you
There seems to be a type of credit card available for just about anything. Department stores have store credit cards that you can apply for to help with your credit recovery. Many gas stations offer gas cards, which is a good way to reestablish credit, more than likely are buying gas anyway. You can use your gas card to help with your credit and when you go home, just pay it off!
Denied New Credit?
If you have tried the above suggestions already and you were denied new credit, there are still opportunities to reestablish your credit. If you feel that the use of a credit card is a necessity for your life than applying for a secured credit card may be something for you to consider. With a secured credit card, depending on the bank you use, you will be required to deposit a sum of money into an account and the bank will allow you to use a percentage of that money in your new secured credit card. The percentage can be as low as 50% and up to around 120%. Some banks will allow you to deposit just a few hundred dollars other banks may need several thousand dollars before allowing a secured credit card in your name.
Secured credit cards can potentially help with your credit …reporting agencies don’t always allow secured credit cards to improve credit scores, and the cost is expensive. There are many fees associated with secured credit cards…The good that can come from a secured credit card is after time the bank may convert it to a traditional unsecured credit card.
Bank/Credit Union Loans
Bank or credit union loans are another path you can follow to financial recovery. Often, when your credit has taken a severe hit, your bank or credit union will be more likely to issue credit to you before anyone else because you can use collateral if necessary. For example, banks will allow you to take out credit against your savings account or a car etc…
Something that is not always easy, but can be more affective more than anything is finding a cosigner when applying for a loan. There are not a lot of people who are willing to put their own credit at risk for someone else, But if you have that special friend or family member that you can convince that no harm will come to their standing with creditors – this may be the better way to go for you, but only you can make that decision for yourself.
Start preparing for the future and the next unforeseen event. Focus on making your payments on time consistently while setting aside some extra savings and you will be out of the trouble you find yourself in before you know it.