With the economy being like it is, it is understandable for you to get behind with your bill payments even if you never have before. Unfortunately, there is no such understanding with the credit reporting companies so your credit score will still be affected. Millions of other people are right there with you watching their credit score plummet as their chances of obtaining loans and credit cards dwindle.
So, what to do? Get some fast credit repair done on your credit score with these simple steps:
#1 Get a credit card
Don’t get caught up in the vicious debt cycle in the name of boosting your credit score! All you need is one (or maybe a maximum of two) credit cards to give your credit score that much needed boost.
You can either get a regular credit card or a secured credit. The advantage with the secured one is that the bank gives you a credit line based on how much you have in your account. That way, it is sort of like a debit card. The regular credit card on the other hand doesn’t subscribe to this policy so you will negotiate your credit line based on your credit score.
To make sure that you don’t dig yourself into another hole, read all the fine print. Avoid the high penalty interest rates and other fees by paying every month on time.
#2 Minimize the use of your credit card
Regardless of your faithful payments, you need to keep the use of your credit card as low as possible. The balances on your card account to a greater percentage of your credit score than your dutiful payment, such that the larger the balance on your card, the higher your credit score. Keep your utilization as low as 20% and your credit score will be fine.
This can be hard to do if you have more than one credit card but you can stay on top of it by:
- Setting up email or text alerts to let you know when you are approaching your personal limit.
- Shifting your credit between your cards to ease the burden on one e.g. moving your debt from the small balance-large limit card to the large balance-low limit card where it won’t have as much impact on your credit score. Just be careful not to overload one card.
#3 Get an installment loan for fast credit repair
Addition of good credit trade line accounts with concurrent deletion of even just one bad credit account can get your credit score up by as much as 80 points. Apart from a credit card, you can get an installment loan as a good credit account to give you that boost. An installment loans shows a sense of responsibility because you will be paying for it for some time.
Consider getting this loan from your local community bank or credit union. Such will most likely give you a better loan repayment package than a larger bank.