Getting Better Credit (Drake Herman)

Having bad credit or even no credit can be a stressful and unfortunate circumstance. Maybe there's a new car or a house you've been looking to buy but you can't seem to get the loan you need because your credit just simply isn't there. The woes of having bad or no credit are problems that haunt everyone at some point in their lives but luckily these issues are completely correctable! No one needs to live with poor credit or no credit and that what these posts are designed to help you with. Even if you have or are on the path to great credit here are some helpful tips to help your improve your credit score and get on the right financial track:

Going From No Credit to Good Credit

No matter what your financial goal is any large or major purchases are gonna require some credit. Starting with no credit it’s going to be pretty difficult to accomplish this if you cannot get a loan. In this post we’re gonna go through two methods that i myself used to help start building some credit from no credit.

Credit Cards

For starters one great and easy method of building some credit is through a credit card. I know what you might be thinking to yourself at this point. You’ve heard horror story upon horror story of the damage credit cards can do. Throw these fears aside though because we are going to tackle credit cards in a safe and effective manner that will benefit you.

To begin we’re going to need a credit card. I would recommend getting this card from your credit union, bank or wherever you keep your cash. This is because these cards are normally secured, obtainable with no credit, and don’t have annual fees. If your place of banking doesn’t offer a card that meets these criteria seek one out. Once you have the card it’s just a matter of making smart purchases. Mainly purchases you were going to make anyways. Say you need some groceries or are looking to buy a new gaming console. Being that you already have the funds for these items purchase them with your credit card and set yourself a payment reminder. Being that this money was already in your possession, you’ll be able to pay off the bill and watch your credit score climb.

Loans

This second method might not be as easy starting from no credit, but with some help from a family member or another trusted individual can be effective nonetheless. Here you don’t need to have a credit card and will just need the help from a trustworthy co-signer.

Say you’re looking to buy a new car and take out a loan to purchase the vehicle. Here your trustworthy individual comes into play to help co-sign on the loan and increase your chances of getting the loan you need. Though now, you’re stuck with the pesky car payment. This isn’t necessarily a bad thing though. Similar to the credit card making your monthly payments on these loans will also increase your credit score. It doesn’t have to be a car either. Students loans could also work to help you increase your credit. Just make sure you’re making your payments and you’ll see your credit score climb.

How to Improve Bad Credit

For whatever the reason might be you’ve found that you have poor credit and it’s creating some issues for you. When your credit is poor it is increasingly difficult to make large financial decisions. Whatever it might be that has caused your credit to plummet in this post we are going to cover how to get the credit back up to where you’d like it to be.

First things first if you have bad credit you’re obviously doing something wrong. Spotting what the issue your having may be is the first step to improving your credit. If you have a history of making late payments this should be the first red flag to you. Making late payments also is the most detrimental factor to your credit score. Similarly, if you have gained a large amount of debt this can also put a significant impact on your credit score. Other factors to your poor credit score could also be your age or your amount of credit applications. Age effects this as if you are new to borrowing there is little creditors know about you and because of this it may take time to see credit scores improvements. On the other hand, if you’ve applied for a large amount of credit cards this can be a sign that you are financial overextended also leading to poor scores.

Once you’ve pinpointed the issue that is causing your bad credit it’s time to put together a plan to start improving it. If you keep making late payments, what are you going to do to start making those payments on time? If you acquired an amount of debt, what steps are you going to take to start chipping away at the debt and cleaning up your score? Finding the issue here is the main step. From here it’s just a matter of correcting your mistake and moving towards better and better credit!

Maintaining Your Credit

Whether you started with bad credit or no credit you have your credit score climbing and are asking yourself, how do I keep this going. Luckily, for you, the hard part is over. If you’ve already taken the steps to improve your credit you’re already on the right track. The key is too keep this good habits you’ve developed going and maintain the credit you’ve built.

To maintain a good credit score you simply have to keep doing the things that got you that score to begin with. Keep yourself organized and keep setting reminders for when your payments are due. For example, keep paying your bills on time and keep your credit card balances low. Continue the plan you’ve set in place to chip away at your debt and limit your credit card applications. All these habits that you’ve developed will continue to work and will continue to show you improvement. Though, most importantly, keep and eye on your credit. You’re now doing everything right but that doesn’t mean that issues out of your control can’t arise. So keep on eye on your credit score and correct errors that might pop up from time to time. With continued practice of these good habits you’ll have no trouble maintaining that credit score and seeing improvement after improvement.