Do you have bad credit?
Is your credit score below 740?
If it is, it’s costing you a lot of money.
Yesterday I wrote, “What is the True Cost of Bad Credit?”
So you know bad credit costs you a lot of money.
Now you need to focus on improving your credit score.
So how do you repair bad credit? Where do you begin?
That’s a good question.
Starting can be overwhelming and starting is the most difficult part but it is also the most important.
So let’s take it one day at a time and start with your bills.
Pay Your Bills on Time
This means every bill. It doesn’t matter if it’s $10.
Pay it on time.
This seems obvious but for some reason you might not pay your bill on time.
Whatever you have to do to get organized and always pay your bills on time, do it.
Use your phone’s calendar, set up bill pay, use Google calendar or even a paper calendar.
Just don’t make a payment or miss a payment.
Guard Your Credit Checks
Don’t let anyone check your credit unless they absolutely need too.
Several credit checks in a short period of time will ding your credit score.
So only let someone check your credit if you get something from them.
Like a place to rent or new credit card.
Pay Off Your Balances
This ones seems obvious too.
Pay off your balances as fast as you can stomach.
But focus on credit card balances first.
These are high interest and eat you alive.
Then focus on any loan balance that isn’t your car or house.
If you pay off all your loans except your car and house, you will be in good shape.
Get Another Credit Card
That’s right get another credit card or two.
Get them with cash back rewards if you can.
This may surprise you but hear me out.
You need at least one credit card without a balance to do this.
Use your new credit card to buy groceries and only groceries.
If you have two, divide the month in half.
Use one credit card for the first part of the month and the other one for the second part.
Then pay the entire bill every month when it comes in.
You will establish a good credit payment history of paying off the balance every month.
And the credit card’s interest rate won’t matter.
When you pay off the balance every month, the credit card company doesn’t charge you interest.
As a bonus, you will accumulate cash-back rewards.
At the end of the year, use that cash back to pay off your other loan balances.
See? It’s starting to snowball.
Time heals all wounds right?
Well only time heals some credit wounds as well.
If you filed bankruptcy or lost your home to the bank through foreclosure, time will repair these hits to your credit.
Most bankruptcies and foreclosures stay with you 7 years.
But chapter 7 bankruptcies stay with you 10 years.
I hope you skipped this article because it didn’t interest you.
I hope you have great credit.
But if you don’t, it’s okay.
You can improve your credit score but you have to do something about it.
Good credit is not coming to you.
So get back up on your feet and start walking toward good credit.
Do you have any other ways to increase your credit score?
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