Secure the Bag, Girl: Glow & Boss Up Your Credit

Maintaining your credit profile can feel like a formidable task during the best of times. After experiencing a worldwide pandemic, many of us are left with concerns about how changes in economic conditions may affect our credit. Even in today’s environment, a good credit score is fundamental to mortgage loan approval, opening a credit card, renting an apartment, getting decent insurance rates, and even some job opportunities.

Despite the unique challenges of our current economic environment, here are some ways you can begin to earn or maintain good credit:

Pay your bills on time

Apart from extreme circumstances like bankruptcy or tax liens, nothing has as big of an impact on your credit history as of late payments. In fact, thirty-five percent of our credit score depends on our payment history. In order to maintain or build your credit, make sure all your bills are paid on or before the due date. If you’re having trouble paying, reach out to your lenders to inquire about payment arrangements, fee waivers or lowering your interest rate.

Avoid maxing out credit cards

Lenders are much more likely to assume that you have trouble managing your finances when you max out credit cards. As a further matter, thirty percent of our credit score is based on the amount of debt we owe. When possible, keep your credit card balances low. Ideally, credit card balances should remain under 10% of your overall credit limit to maximize a positive impact on our credit scores.

Establish or Rebuild Credit

Alternate avenues to establish and build credit without taking on extra debt is crucial during changing economic times. You can build your credit by opening a secured credit card. These cards ask that you deposit a certain amount of money in your account for which you will receive a charge card. Then you can make purchases up to the amount of money that is in your account. Credit reporting agencies treat these cards just like regular credit cards and look to them as a responsible way for you to establish a favorable credit history. Once you get the card, make a few small purchases and pay them off completely. Do this a few times over the course of a year and you’ll find yourself with some established credit and excellent payment history.

Also, consider a credit builder loan to build your credit and establish a positive payment history. With a credit builder loan, the money you borrow is put into a “frozen” savings account on your behalf. The loan is then repaid on a regular basis using auto-pay withdrawals from your account. When your loan is completely paid off, the money you initially borrowed is released to you. In the end, you will have saved up money, and, by making regular loan payments on time, you will have established credit and positive payment history.

Steps to Take

Check your credit report for inaccuracies: Unfortunately, most credit reports contain errors that can negatively impact your credit score. Review your reports and if you find something that needs to be corrected, contact the credit bureaus to request removal of the inaccurate account information. 

Credit plays an important role in our society and daily lives, making it necessary to maintain on a consistent basis. It takes time and a little bit of effort, but it certainly can be done.

Post Sponsored By: Shelley Wallace of Conquer Your Credit.