My credit has been far from stellar for many years. For a while since I had already purchased my house and paid off my vehicle, I didn’t really care that it was considered “bad” or “fair.” In my situation I looked into refinancing my home because the interest rates are very low right now. I shopped my mortgage brokers and most of them said my credit needed to be bumped up. I wasn’t surprised to say the least! With the help of a mortgage broker and my free financial adviser I was able to get some great tips. I was able to boost my credit score by more than 80 points in 3 months. First, I want to share the factors that were keeping my credit down and they may be the same for you.
Bad debt to income ratio
This means you have an unbalanced amount of debt to your income.
Negative or late payment history
Anything that you have in collections will be listed or if you have been 30 or more days delinquent on any debt.
Not enough credit usage
If you do not have any open credit cards, or small limits. In my case I hadn’t used a credit card in 8 plus years. That is good and bad. I didn’t rack up any credit card debt in 8 years, but I also was not building any credit either. Trust me I believe cash is king too and credit cards are bad, but if you need to get a loan at a good rate, it is vital that you have good credit.
Here are the exact steps I took to boost my credit over 80 points.
Open and Experian account, http://www.experian.com .
You can choose to have the basic account which is free. There is a monthly membership you can opt to get that is $1.00 a month and it will monitor your credit very closely. I chose the free membership and it still does alert you through email if there has been any change to your credit.
After opening your Experian account go through your report with a fine-tooth comb. Find every negative bit of information on the report.
Next, dispute every negative mark on your credit report.
This does not guarantee it will be removed, but you may as well give it a shot. It is very easy to dispute on Experian. It can take up to 30 days to get resolved. There are companies that you can pay to do the exact same thing you can do for free. I almost went that route, but decided not too and I am glad I didn’t. Most of my negative marks were removed and it substantially boosted my score.
Open a credit card
If you have a good income and can be responsible here is the major factor that boosted my credit. I opened two new credit cards. The interest wasn’t great on either, but if you pay them off in full, you’ll be fine. I bought only things that I would normally purchase like gas or food. Key factor is do not go over 30% of your limit and pay it off in full every month. They want to see that you are not desperate and are responsible with payments. Also, just because your credit is bad or fair still try to get a credit card with no annual fee. I went through my credit union and way able to get a decent interest rate with no annual fee.
You can opt for a secure card if necessary(maybe credit is too low or you don’t want to be irresponsible with credit and get yourself in trouble), which will make you have to be more responsible with your credit since it initially is your money that you deposit into your account.
If I can boost my credit anyone can.
I seriously was so excited each time Experian sent me a positive alert letting me know my credit had gone up. I promise if you follow any of these steps you will be able to make some headway in turning your credit around.
Good luck and I would love to know how your journey to good credit is going if you try any of these steps out.