July 9, 2017
How to Improve Your Credit Score and Managing Your Debt
Today, almost everything you do requires a good credit score. It affects your ability to secure a mortgage, to buy a car, rent an apartment, to go to college and sometimes may even determine whether or not you land the job. For this reason, if your credit score is low and has several bad marks on it against you, it’s in your best interest to repair your credit score as quickly as possible. The good news is that there are many ways to achieve this, faster than you might think.
Borrowing money with a bad credit score
A bad credit score limits your ability to borrow money from the usual places such as a bank and a credit union. However, there are other companies offering quick installment loans to those in the process of building or rebuilding their credit. These online companies generally have minimal requirements including a social security number, a checking account and a steady income. They also have a variety of repayment options that let you pay off the loan in small payments for up to a few years. Just make sure that before you actually take on the loan that you are able to meet your monthly obligations, otherwise your credit will continue to worsen.
Family and friends
While no one wants to let a family member or friend know about their hardship, sometimes acquiring a loan from them is a better option. For one, the repayment of the loan will be the same as the amount you borrowed. For two, you can delay the payment a few days during the month if your paycheck falls midweek. If you should acquire the money from a family member or friend, just make sure to treat it like any other loan and make every effort to make the monthly payments.
Restoring your credit
Restoring your credit is important and can take far less time than you might imagine. The first thing you need to do is make a list of all your outstanding debt and the monthly payment required on each one. Then, write down your total monthly income. If when you do this and deduct personal living expenses you have money left over, you’re in great shape to begin tackling the first loan or credit card. If, you don’t have anything left over, or, worse yet, have a deficit each month then you’ll need to reduce your monthly expenses or take on a part-time job until you even out.
Paying down debt Your credit score depends on several factors. It consists of your ability to pay, how much debt you owe and the amount of credit cards and other loans you have out and their balances. In order to raise your credit score, you have to pay down your debt. If you have six or more revolving lines of credit, close out a couple. Having access to too much money can actually hurt your score. If you have two to four credit cards, a car loan, and a mortgage, you’re in good shape. Any more than that and the debt to income ratio becomes too high, placing you in the possible risk category. You should never use credit cards as a means to pay bills, go food shopping and basically afford to live. If you want to raise your credit score significantly, you’ll need to reduce your balance on each credit card to less than 50% of the available line.
You can do this one by one, by making payments to the card that holds the highest interest rate and then move onto to the next until all your credit cards are a least less than half full.Today, you live in a technical world where a credit score pretty much determines whether you can purchase just about anything. You can keep your score in good standing by making your payments on time, reducing the number of outstanding loans and cards you have, and by reducing the amount you owe on them. If you learn to live within your means and use your cards only for emergencies or as a temporary way to acquire items before a paycheck of bonus, then you will enjoy a high quality of life minus the stress.