3 Things That Can Quickly Fix Your Credit
Updated: Jul 17, 2022
June 22, 2022
Having good credit is almost like having a million dollars! It opens so many doors and gives you amazing spending power.
It allows consumers to take a serious look at you and your money, motivating them to sell you the things you need.
It even saves you money by allowing consumers to offer you low interest rates.
Most people don’t have hundreds of thousands of dollars lying around, therefore, they need credit to make major purchases such as a car or home.
There are often 2 other types of people: first, people who have a love-hate relationship with their credit due to lack of knowledge and/or negligence, and second, those who feel that not using credit and thus having no credit history makes them better than those with bad credit.
In this article, you will learn 3 ways to quickly fix your credit by,
1) Getting a secured credit card,
2) Paying your current bills on time, and
3) Disputing inaccurate information on my credit report.
Get a Secured Credit Card
One of the easiest ways to build your credit, whether you have bad credit or no credit, is to get a secured credit card. Now you may be thinking, “Who's going to give me a credit card, I have bad credit or no credit.”
That’s the thing about a secured credit card they are risky. According to this great article I read in The Balance, author Latoya Irby mentions that “ secured credit cards require a deposit that serves as collateral for purchases you make using the card. If you default on your payments, the card issuer keeps your deposit.”
You will have to start the habit of paying your bills on time. If you have not made up your mind to build good spending habits this may not be the route for you yet. However, if you decide to take this route there are some pros to getting a secured credit card.
It is really easy to get approved
It is reported to the credit bureaus
Your deposit is included in the balance and you only lose it if you default
You can upgrade eventually with good behavior
Now, let’s talk about your chances of getting approved. You are more likely to be approved for this type of credit card because you have to give something to get something like I mentioned before. That something is in the tone of about $50 to $250.
But beware, you shouldn’t pay more than $50 dollars for a secured credit card. The research gathered for this article led to a great article about the best types of secured credit cards around right now. According to Virginia C. McGuire, an author for NerdWallet, there are secured cards that offer rewards through cash back on purchases to cards that don’t even have to check your credit before approval.
If you decide to go this route, remember you can’t go on a crazy spending spree. You have to be responsible with your spending and pay your bill on time. If not, you could lose your deposit.
If you are afraid to tempt yourself with this type of commitment, the next alternative to getting a credit card without getting a credit card is to ask a trusted friend or family member to make you an authorized user on their credit card.
If you have never heard of this like most people I know, Alexandria White an author for CNBC, explained it in the best way I have heard in a long time. She writes that you're basically piggy backing off of someone else's good credit until you get your own good credit. But for this to work for you, You have to choose someone that has good bill paying habits. Make sure that this person has a credit score of at least (670-799) , which is good credit, or excellent credit which is (800-850).
As a matter of fact, I learned the hard way that not paying your bills on time has a tremendously negative affect on your credit score and credit history.
Speaking of responsible bill paying, this is another great way to build your credit.
Pay Your Bills On Time and Report them to Credit Bureaus
Let’s say you now have a credit card, but feel you could be doing more to help build your credit, go with that thought, because you should and you could.
You can decide today and moving forward, to paying your current bills on-time. Paying your car note, personal loan, and credit card bills on time impact your credit score and credit history in an enormous way.
According to My Fico, which is one of the best additions you can make to your personal finance community, payment history makes up 35% of your score and is a major factor in the payment history calculation of your credit report.
So you see the urgency!
That is a big chunk of your credit history. You may think just paying them is enough, and that you work so hard to do that. But not paying on time is hurting your credit as if you are not pay them at all.
PAY THEM ON-TIME!
Another awesome thing you can do is report your rent and some utility bills to the credit bureaus (Experian, Equifax, TransUnion) to get yourself a boost to your score, if you have a habit of paying these bills on-time. You would have to self report these bills to the credit bureaus yourself using their individual app or website, but the effort will help.
I personally used Experian Boost for my utility and cell phone bills and I used Rent Reporters to report my rent payments. Rent Reporters charge a small fee but I didn't need to use them for very long and felt it was worth the investment to reach my financial goal.
The last thing you can do to build your credit costs you nothing and doesn’t involve asking a favor of someone else.