Have you recently checked your credit score? Is your score is lower than what you expected? Good news! We have five strategies that you can use to improve your credit score:
1. Pay on Time
Planning ahead will help you pay your bills on time and avoid late fees and other penalties. This can be particularly helpful if your income changed due to COVID-19. If you are unable to pay on time, check with your creditor to see if they still have policies in place to assist those affected by COVID-19.
2. Watch Your Utilization Score
In other words, keep most of your credit limit available. A utilization rate is simply the balance-to-limit ratio of your credit cards. You will want to keep all your credit card balances at a maximum of 30% of your credit card limit. Since credit scores change day-to-day, your credit card balance can appear higher on one day than another, say the day that you pay your bills. This will put you in the best position with credit-scoring bureaus.
3. Get a Secured Credit Card
You may be hesitant to open new lines of credit after filing for bankruptcy, but you will need to show that you are able to build and maintain good credit. A secured credit card works similarly a debit card in that you pay the bank a security deposit prior to using it, but all the payments made will be reported as credit. If you get a card that you want to continue using in the future, you can eventually ask to have it switched to an unsecured card. When you are ready to make the switch, be sure to avoid any cards with high “start-up” fees to keep from going back into debt.
4. Get an Installment Loan
An installment loan is a loan that is repaid over time. These payments occur in a specific amount of scheduled payments. The length of an installment loan can range from a few months to years. Believe it or not, paying off an installment loan or actively making payments on one can have benefits for your credit score.
5. Become an Authorized User
An authorized user is a person with permission to incur charges on another person’s account. Becoming an authorized user can give you all or most of the credit score benefits without requiring you to qualify for the card in your own name. Reporting to your credit will take time. So, you should call the credit card company and ask if they require any additional information to expedite the reporting.
Need More Information?
Don’t be afraid to ask for help! If you are struggling or having any trouble making ends meet, speak with a professional. Our office can go over your unique situation to find what options will work best for you.
At the Law Office of Daniela Romero, we believe in relationships that are based on trust. Before we work together, we would like to get to know you and we would like you to get to know us. We want you to be sure you are the right fit for us and that we are the perfect fit for you. This will allow you to be completely comfortable sharing intimate and difficult details of your case, so we can offer you representation to the fullest extent of the law. Call us today to set up a free consultation.