Keeping Score: Improving Your Credit Part 2

In our last article Keeping Score: Improving Your Credit Part 1, United Country Midwest Lifestyle Properties gave you some suggestions on how you can improve your credit. We began with pulling your free credit report with Credit Karma and additionally with TransUnion. Looking over those reports, you reviewed the areas you are weak. You could monitor your credit along with increasing your score; while getting tips and insights into building creditworthiness and staying alert for fraud.

The next focus was to have you pay off credit cards using the Snowball Method, The Avalanche Method, or Credit Consolidation. In today’s article, we are going to review several options for spiking your credit score.

Pay your bills on time!

Paying your bills on time is highly influential in the credit world. Nothing will damage your credit quicker, like not paying your bills on time! Late payments stay on your credit report for SEVEN years. OUCH! If you have a payment that is 30 days late, quickly call that creditor and have a payment ready. Ask the creditor if they would consider NOT reporting this to the credit bureaus.

Higher credit limits? Is this a joke?

No! Asking for higher credit limits is not a joke. Ask your credit card company if increasing your credit limit will trigger a “hard credit inquiry”. If it does, it may temporarily drop your credit score. The secret to having a higher credit limit? Once you ask for the higher credit limit, you KEEP YOUR BALANCE THE SAME! This lowers your credit utilization (a big factor in credit scoring), which can improve your credit rather quickly. Folks who can restrain themselves from spending more should use this credit trick.

Another credit trick you can try is to ask a friend or family member with good credit if you can be an authorized user of their credit card. You should be clear you only want to be listed and not have any cards or account numbers to use. You simply are riding their credit ‘coattails’ to improve your credit. If you have had some history of bad credit, this credit trick may take a few months to improve your credit.

Secured credit is another effective option for rebuilding your credit. Actual cash backs this credit card – think self-imposed credit limit. If you want to buy something with a secured credit card, you must deposit money into that credit card account beforehand. When signing up for a secured card, make sure they report your credit activity to the credit bureaus.

Take out a small loan

Talk with your local bank and share with them your desire to improve your bad credit score. If you are sincere, your local bank will work with you through a variety of programs and options for improving your credit.

The first option you can try is to tell them you’d like to take out a CD loan. This may seem counterintuitive, but it has the potential to be a double blessing. For example, your Uncle Ned has an old truck he doesn’t use much and will sell it to you in a year when he is going to buy a new truck. You ask your bank if you can take out a CD loan in the amount you’ll need to pay Uncle Ned for his old truck. For the next year, you ‘pay’ a set amount due, each month, into the CD loan. When the year is up, you can pull the money from the CD loan with interest, and pay your Uncle Ned for the truck! Win, win!

Another option would be to apply for a small loan to pay off a higher-balance credit card. As you pay the monthly balance faithfully, it will increase your credit score and restore your confidence in maintaining good credit!

Maintaining good credit has lifetime advantages! When you’ve made some bad credit choices, it has some undesirable effects. Repairing your credit should be your top priority when considering buying a home.

Whatever credit-boosting options you choose, United Country Midwest Lifestyle Properties agents are here for you when you’re ready to purchase your dream home or property. Call us at 608-742-5000 and you’ll see why people and properties are our two favorite investments!