This topic contains 1 reply, has 2 voices, and was last updated by security43 6 years, 9 months ago.
September 2, 2012 at 8:05 pm #1185
I trashed my credit score wIth a bunch of credit cards. I just honestly did not understand why it was important. Now I just want to start over.
September 2, 2012 at 9:02 pm #1186
Your credit score is the key to being able to get good interest and insurance rates and in some cases be extended a line of credit at all. With a poor credit rating, you will need to take steps to improve it before you apply for a big ticket item such as a car or a home mortgage. If your score has plummeted recently, the first thing you should do is relax. Credit ratings, while they can fall, can also be repaired. Though there is no overnight cure for a bad score, no matter what those credit repair sharks tell you, you can do a few things that will still make a positive impact quickly.
Open Charge Accounts and Keep Them Open
Credit cards are considered ‘revolving accounts’ because the balance on them can be more than or less than it was the previous month. If you do not have a credit card, opening one is the best thing that you can do to improve your score. For the credit cards you already have but may have become afraid to use, keeping them open is much better for your score. Be sure to make a small purchase on the card every month to keep the line open, and then pay it off right away to avoid charges. The longer your credit history is and the more credit you have available to you, the better your score will be.
Open a Secured Line of Credit
If you are in the same boat as most Americans, the damage to your credit report is probably already done. By maxing out your unsecured lines of credit and perhaps not keeping up with credit payments each month, or other reasons why your credit score took a hit, you probably hurt your interest rates and all but killed your ability to be extended a new line of unsecured credit. The good news is, nearly everyone qualifies for a secured line. The difference between secured and unsecured is that secured lines of credit really work more like a debit card: You have to put money on the account in order to spend that money. How does this help you? By raising the maximum amount of credit you have available to use. And because the credit line is secured, you cannot possibly buy more on the account than you can really afford.
Pay More Than The Minimum
Though it may not make a difference on your score right away, making more than the minimum payment has tremendous benefits. Foremost, you will be saving money on interest fees and finance charges. This is especially important if your balance is high and your interest rates have risen recently. And as the ratio of credit you have versus how much you have used improves, so will your score.