Having the looming knowledge of a poor credit score can haunt you every day. However, fixing it can be easier than you think if you make a plan and stick to it. Here are some simple ways you can turn your poor credit score around.
Keep Balances Low
It’s easy to max out a credit card knowing the money is available to use. However, we often fall in over our heads and reach our maximum before we know it. This can lead to accumulated interest, late payments and inevitably, poor credit. Try to keep an unused amount on your credit card each month instead of maxing it out. Aim for a goal such as 10% or $500 to be left unused each month to help you stay on track. Not only will this prevent you from spending, it will also help with restitution and show a creditor progress in your ability to handle debt and savings.
Pay debt, Don’t Move It Around
Everybody has debt. Whether it be from school, mortgages, cars, or what have you. The key is to keep it visible to creditors. Having visible debt that is slowly being paid and dealt with can prove to be a much more positive look than someone who is constantly moving their debt around with credit cards and loans, which can show instability and lack of responsibility. Be sure to keep up with payments, even if you’re only able to make the minimum payment required if necessary, to show you are capable of handling your finances.
Fewer Cards, Fewer Worries
Some people have the notion that opening and closing credit cards can improve your credit. However, it does quite the opposite. Constantly closing credit cards and opening new ones or opening more cards than needed can be a red flag to a creditor. The best thing to do is to keep as few credit cards as possible and keep them paid on time. A good strategy for this approach is to use one credit card for only a specific purpose. For example, having a credit card in which you use strictly for groceries and not frivolous spending can keep your balances low, and allow you make payments on time. This can show a creditor responsibility and long-term commitment to your financial standing.
Fixing the Damage Done
Instead of hiding or running from your poor credit, it’s best to face it head on with the creditors. Often in life we have explanations for a missed payment or a failed restitution, creditors want to hear them. Negotiating with a creditor about the loss of employment or unexpected expenses can help to conserve your credit standing. While your restitution payment may not be altered, the grace period of paying it back may be. Negotiating a better payment plan or emphasizing past good standing in payments can go a long way in helping boost your credit rating.
Being haunted by poor credit doesn’t have to last forever, nor does it have to stop you from furthering your future plans. Give me a call today at 705-315-0516 to see how we can work with your credit score and find a financing plan that fits your situation, in order to put your mind at ease while getting you into that new home you have your heart set on.