If you want to learn how to fix your credit, here are three easy ways to get started.
- Check Credit Report: The first step is to check your credit score to know where you are at. Here is a link to request a free credit report Myfico. This is a free tool to use and not a soliciting service which is why I recommend it, this is a good place to start for beginners.
- Mark Your Calendar: Keeping track of how many credit lines you open and paying those on time is crucial to having a good credit score. Making payments on time proves to creditors that you are trust worthy to loan more money.
- The 20% Rule: Credit companies allow you to spend the amount they feel you can afford to pay back, otherwise known as a limit. Keeping credit card accounts at app. 20% LDT (Loan to Debt Ratio) proves to lenders that you are not desperate for money and you can actually afford what you are spending.
- Use It or Lose It: If you do not use the credit provided to you then they will evenually close the account so it will not help you.
Using credit in moderation is the key. Not to much, not too little. This let’s banks know that you are responsible and can be trusted with loans and credit accounts.
- The Humble Appearance: Many people lose track of the amount of money they earn in comparison to how much they can actually afford. Keep a tight budget and don’t over spend to impress your friends. Keep track of all of the lines of credit you open and make sure you can pay it off on time no matter what.
Achieve Your Dreams
In the United States having good credit can help you achieve your dreams. Depending on your occupations, how well you save your money and having a good credit score you will be able to buy pretty much anything. When buying a home with a good credit score it will lower your monthly mortgage payment by hundreds of dollars. Having multiple lines of credit open may affect your credit negatively so it’s best to have everything paid and having an auto loan you pay once a month on time. Start with baby steps when having zero credit, open one or two lines of credit maybe at BestBuy with a new laptop or at Video Only with a nice TV. Once you have paid those lines off, then take the next step by buying your first car. This will undoubtedly build your credit as long as you pay it off on time. Once your car is paid off and you found yourself a pretty lady or handsome man with a good credit score and a full time job apply for a mortgage. After you buy a house you will start building equity and you are on your way to achieving your next big dream.
Avoiding Collections is simple, pay your bills on time. If you go to collections it will affect your credit in a negative way and interfere with achieving your dreams. I work for a collection agency in Portland and we try our best as possible to resolve bad debt, but lets be honest know one likes a collection call. So I urge you to follow these simple steps so my company doesn’t need to call you. Cheers.