Our entire society these days is based on credit. In some ways, it always has been, with even paper money representing something more real (gold). In this day and age, however, if you do not have a strong profile of spending and repayment, it can be hard to purchase anything from a house to a car. When you have credit problems, it can seem insurmountable to get back on the road to purchasing power. Read some tips, tricks and advice to fix bad credit so you can wipe away those black marks and become financially solvent once more.
Fix Bad Credit Now
There are three things you can do immediately to fix bad credit, which will get you off to a great start. The first is to check your credit reports. Three major companies maintain reports: TransUnion, Experian and Equifax.
You are entitled to a copy of your report from all three, for free, once a year. Get your copies and review them for mistakes and errors. Check all three, because they each might show different things.
The next thing you can do is to set up automatic payments or payment reminders with your creditors. Paying on time is essential to building a credit score. Payments that are just a few days late can be damaging. Finally, lower your debt. Stop using your credit cards and come up with a plan to pay down your highest interest debts first. Clearing that debt will improve your score.
Outrunning Bad Credit
Once you pay down an account, you will need to “outrun” it—that is, it will stay on your report for up to seven years. Repairing credit is not an overnight fix. Sometimes you can work with your creditor to have a settled account removed, but don’t count on it.
Your income to debt ratio is about a third of your score. The more debt you have, the harder it is to buy. It is a delicate balancing act because you have to use credit to have credit. The key is to keep your balances low and active.
Secured Cards and Bad Credit Loans
There are credit options for those looking to rebuild credit. Secured credit cards are one option. With these, you pay a security deposit up front, which serves to set your credit limit. Your interest rate will be higher than with a standard card, but it is an option.
Of course, you need transportation to hold down a job, and a car is the key to freedom. Car loans are also a “big ticket” credit item which can help show your credit worthiness. Some companies specialize in car loans for those with bad credit. Getting behind the wheel of your own vehicle means freedom and the ability to pay your bills on time.
If you need a new-to-you car but don’t have the credit to get standard financing, we can help. Check out our bad credit car loan services, and drop us a line to get started today!