In the current economic world, credit score is one of the most important factors. Without good credit score, we are virtually nothing financially. It would be much harder to set up utility accounts, rent or buy an apartment, buy a car and do other things. We will also have problems obtaining employment. In fact, not trying to obtain good credit is like shooting ourselves in the foot. Credit score is everything and we put ourselves at risk by allowing ourselves to have bad credit score. The first thing we do to restore our credit score is by obtaining the copy of our credit score.
We should make sure to understand our financial history. As an example, we should check credit card debts that we have incurred and paid off. It is important to make sure that we don’t have any kind of missed payments. Some more serious negative occurrences in the past, such as bankruptcies, seizures and foreclosures will have significant effects on our credit score. If it has happened to us, it is important to try repairing our scores. In general, we can’t repair something that we don’t know. There are many online websites that allow us to gain a copy of our credit reports.
The next step we should do to increase credit score is by obtaining secured credit card. It is a more sensible form of credit card that requires us to prepare a cash deposit that becomes our credit limit. It means that if we have a $500 deposit, our credit limit is also $500. We will be required to make regular payments to pay the money back and if we fail to do that, the credit card provider will take our deposit. However, we still need to make sure that we choose a proper provider that we can really trust. In order to make it work, we should use the card often. As an example, we can make multiple daily purchases at gas station and grocery stores.
With credit cards it is acceptable to make minimum payments, but it is recommended to pay more. Agencies will look at our financial behaviour and whether we pay our credit cards regularly. As an example, if we pay more than the minimum payment, we will be included in the “making more than minimum” category and our credit score will recover more quickly. This is a very easy way to gain credit scores. If we want to increase our credit score, it is important to pay off our old debts.
When we have paid off one debt, we will gain extra boost in credit score. We should start with loans that have the highest interests. By eliminating debts with high interest rates, we will save more money in the long run. We could use secured credit card, instead of the normal one, because the interest rate is usually lower. We should make a calculation about how many times we could make a payment before a debt is paid off.