No matter how good we are with money, achieving our ideal credit score and keeping it on the up and up is sometimes easier said than maintained. There’s nothing more frustrating than feeling like we’ve been nothing but financially responsible and then suddenly, there’s a sudden drop to our credit score that seemingly came out of nowhere and will take a hot minute to fix.
As many of us have learned the hard way, it can take much longer to improve one’s credit score than it takes to shave a few numbers off, or completely destroy it. But don’t let your less-than-perfect credit score get you down. If you’re willing to work consistently to improve it, you’ll get out what you put in. And it may not take as long as you think.
These money-smart moves can help get you to reach that sweet 700 and beyond. The trick is starting your journey towards better credit today.
Contact Your Creditors
When it comes to improving your credit, a good chunk of your financial fate is in the hands of the creditors. So put it back in yours by establishing a dialogue and being clear about your situation. Even creditors are human, after all. So it’s time to write a letter, human to human.
We all make mistakes. But to move on, you must face them. Let’s say you have a mostly solid credit history, but a few blemishes are now holding you back. Explain why the marks are there and what you plan to do about it moving forward. Ultimately, this is an attempt to get back in your creditor’s good graces, and it may even improve your credit score.
In your goodwill letter, be sure to mention the following:
- Explain your customer history with the creditor.
- Be honest.
- Take responsibility for the marks on your credit history.
- Describe the steps you’re taking to avoid repeating the same mistakes.
- Discuss the financial progress you’ve made.
- Make it clear you are seeking forgiveness, but show that you know it’s up to you to fix your financial situation.
- Be clear and concise.
- Include all contact information, including your account number.
Cut Ties With Your Credit Card Company
If you have credit card debt, you don’t need me (or anyone else) reminding you of it. Your life is likely full of constant reminders, including bills and interest rates that seem to continuously escalate.
It’s no secret that one of the most lucrative ways credit card companies make money is by enforcing sky-high interest rates for those with less than perfect credit. However, not all credit card companies are out to get you, even though it may feel like it sometimes. If you qualify, some are even there to help you boost your score, offering low-risk routes to stabilize and rebuild your credit more safely.
Here are 10 of the best credit card companies for rebuilding credit, compliments of Best Money.
Don’t Let Your Credit Score Control You
As noted by The Penny Hoarder, “Credit scores are split into five categories: very poor, fair, good, very good, or exceptional. Getting tipped over the edge into the next-highest bracket can save you thousands of dollars on a mortgage or car loan. It also can help you qualify for a better credit card — one that gives you points or cashback.”
The lower our credit score, the higher interest rates can potentially be. In fact, if you have objectively bad credit, you may be losing thousands of dollars each year. Nine times out of ten, a fat stack of that cash is directly tied to interest charges.
So why not steer clear of credit cards altogether? Here’s how to do it and still build your credit.
While debit cards typically don’t help with building or repairing credit, there are a special few that can give your score a boost. For example, Extra is a debit card service that can help with building credit without the common pitfalls and payment spikes of a credit card. Consistently voted best overall by financial experts, you’ll be getting the credit boosting benefits of a credit card without the typical risks, credit check, deposit, or financially crippling interest rate.
Choosing the right card can make all the difference. While Extra is a financial expert option, there are more of its kind worth learning about. So do your research. And in the meantime, these are the best debit cards for building credit right now, compliments of Digital Honey.
Seek Credit Score Help Online
Considering we’re stuck with our credit score, it’s important to make the most of it. A budget that works for us and not against us is a crucial part of our financial health, and building a solid credit score can help us get to where we need and want to be.
Sometimes, the reasons our score might be a little lower aren’t truly reflective of our financial habits or credit journey. Sometimes, a single error can lead to a big dent in our report. And the reality is, even if you’ve been actively working to build your credit, one bill in collections can do lasting damage. When you’re credit takes a hard hit, it can have a way of lasting or getting worse. But you don’t have to carry the weight alone.
With a little guidance, you can turn even the worst credit score around. You just need to make the most of your online resources. No matter your financial situation or necessary payment strategy, there are free websites out there designed to help you choose the best credit repair path for you. You’ll also be given tips to help you stay on track. Sites like Credit Karma and Credit Sesame take an up-close look at your credit report and provide you with personalized, detailed feedback on what can, should, and must be done to improve your credit score and overall financial well-being.
Boost Your Score Instantly
Considering the time it can take, sometimes the hardest part of boosting our credit score is knowing where we should start. The good news is, that there are ways to potentially boost your credit score in an instant. As you might’ve guessed, you’ll need to get online first.
Picture this: someone is on their smartphone and taps the screen and boom! Their credit score goes up before their eyes. That’s what services like Experian Boost offer. But the process has a few more steps than depicted in the commercial. Namely, paying some of those not often accounted for bills.
With services like this, you could potentially be given credit for various bills, like phone and utility bills that are already attached to your Experian Credit Report. Lenders will be able to see that while you might have some marks, your report will reflect that you also have a history of making on-time payments. And whether or not you’re going to pay on time, or at all, is the primary thing anyone assessing your credit is attempting to figure out.
With insta-boost sites like this, you may not get enough points to get bumped up from “bad” to “excellent credit,” but a little bit can go a long way. With Experian Boost, users have reported the free service gave them an up to 13 point jump that brought them from “fair” to “good.” So why not give it a try?
The Bottom Line
It goes without saying, our credit score is one of the main measures of our financial health. Whether it’s fair or not is sometimes another story. After all, lenders only have to take one look at it to decide if you qualify or how high your interest rate will be. Others are willing to hear your side of the story before making a final decision. That’s also why reaching out can be so helpful.
While you might be okay with less than okay credit, you shouldn’t let it limit or financially strap you. And if you know your credit is causing more harm than good, it’s time to take repairing it seriously. Remember, the better your score, the better your approval odds.
In addition to all the financial expert-approved steps we’ve discussed in this article, remember the golden rules of credit health. If you want to maintain or boost your credit score, make minimum payments on time, pay down your credit card balances to keep your credit utilization at its lowest, keep old lines of credit open, and avoid opening more.
While it might seem out of reach, it’s not impossible to turn your credit around. Ultimately, the only thing standing between you and better credit is taking the necessary (and most strategic) steps to get there. And there’s no time like the present to start making financially healthier changes.