How To Rescue Your Credit Score
Filed under: Education, Finance
Our credit score is one the most important three digit numbers we have in our lives. What can a credit score do for us? For starters it can determine our ability to rent an apartment, qualify for a loan at a decent interest rate, determine whether we receive a cell phone contract, and sometimes it can play a role in whether we get a job.
So if your credit score isn’t as stellar as you would like it to be, but you would like to work on improving it, here are some tips on what you can do:
- Call your credit card companies and try negotiating for lower interest rates. These credit card companies will not volunteer a lower rate, so if your score is on the rise, try asking for a reduction in the interest, which in turn will help you pay off those credit cards faster. Paying credit cards off faster leaves you with a higher credit to debt ratio, which of course makes your credit score grow.
- Pay your bills on time. 35% of your score depends on your payment history. As difficult as it may seem, put away that money for bills you know are coming due. Don’t play first and pay later as you will continue paying and paying later. If possible consider setting up automatic bill pay. This will keep you from being tempted to spend money you see in your account before paying your bills.
- Don’t max out your credit cards. 30% of your credit score is based on how much you owe. And if you do pay off your credit cards, don’t close the accounts as having them open shows that you have credit.
- Avoid opening several accounts at once. Lenders worry that people who open numerous credit card accounts are on a buying spree. 10% of your score depends on new credit.
- Pay off the credit cards with the highest interest rate first. This seems like a no-brainer, but many people don’t even look at what their interest rate is and when they have extra cash they either spend it or throw it on the credit card with the highest debt rather than the credit card with the highest interest rate.
- Consider a balance transfer. You have seen credit card offers with zero percent for a specified period of time. This is a great solution if you can pay off your debt during the introductory period where often there is little to no interest. But watch
out for the fine print on some of these offers. Such companies can be very stringent about late fees and sometimes hide other costs.
- Last and most importantly, create a budget. Write down your expenses, how much debt you have, what bills you must pay each month and contrast them to your income. Be realistic with yourself as to what your financial situation truly is. Often, when we don’t look at it on paper, we continue living in a fantasy and spend money recklessly, that is until it catches up to us and makes us miserable.
Remember, there is always a solution, but it starts with being honest and taking that first step. Practice the above and in no time your credit score will be worth bragging about.
Franklin Buck is the friendly spokes person for ThinkCash.com, a company that provides (personal loans – will vary) to individuals. For more information, please visit www.ThinkCash.com.
Tags: car costs, Car Loans, credit, debt, installment loan, money, short term loan
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