April 11, 2015

Credit Counseling

Unfortunately, credit is an important part of our life. Good credit is required for so many things, like applying for a car or home loan, applying for a credit card, and even some seemingly unrelated things, like getting a job. If your credit score is lower than average, you’ve probably already found out that life can be a lot harder for someone with a low score. Fortunately, there are plenty of ways to improve your credit score. Of course, there is no overnight fix, but here are a few ways to get started fixing your credit score.

Pay Everything On Time

This might be obvious to some, but it’s one of the most important steps to raising and maintaining a credit score. Whether you have bills from credit card companies, banks, or companies that provide anything else like power and water, every time you don’t pay them completely, your score drops a little. If you can’t pay every bill off completely, pay off as much as you can each time. This might also be a good time to talk to a debt counselor, as you may have more trouble than you realize.

Apply for Credit at the Same Time

If you do need to apply for credit, for example, a debt consolidation loan, try to complete all of the applications in a relatively short period of time. When the credit agencies notice that you’re applying for credit a large number of times, they assume that you’re applying for multiple lines of credit, which could drop your score. However, as long as the applications are within a shorter period of time, say a month or so, they are more likely to understand that you are simply applying for a single line of credit in multiple places.

Wait for Good Credit

This is not the most efficient way to raise your credit score, but it can be helpful to you. Credit agencies only consider activity within the last seven years. This means that even if you have terrible credit now, and you do nothing more than follow the rules of maintaining good credit, such as paying bills on time and keeping a reasonable debt-to-credit ratio, your score will go up by itself over time, and in seven years, you’ll have pristine credit.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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