Credit scores can slip easily if you spend more than you can afford and miss a payment. Fixing your credit score is important if you want financial security for your family or if you need to apply for student loans. Overcome your fear of facing your debt, and try a few methods to raise your credit score.
Raise Credit Limit
Contact your bank and see if it can approve a higher credit limit on your account. Having a high credit limit demonstrates to potential lenders that your bank thinks that you are responsible. Banks typically raise credit limits on accounts that have shown financial reliability, which hopefully you have. If you can get a larger credit limit, you might get approved for a mortgage or loan that you need. You also only want to spend a portion of your limit. According to Credit Info Center, your score will plunge if you charge close to your limit even if you pay it off each month (see Reference 1). Ideally, spend only around 20% of your credit limit each month.
Be Added to Someone's Card
Having your name added as an authorized user to someone else's card can help your credit score. Consider asking your mom or significant other if they mind adding your name, and explain your motives. Being specific about wanting to accomplish certain financial goals may show them that you are serious, which should convince them to add you. According to Bad Credit Advisor website, being added to an established card can improve your credit score (see Reference 2). If your family is concerned about adding you because of past mistakes, explain that you do not need a card for the account and never plan to use their account.
Stay on top of Student Loans
Student loan payments are vital to your credit score. Defaulting on a student loan can wreak havoc on your credit score, and it causes numerous other problems. For instance, the Internal Revenue Service can take your tax refund. The government might also take up to 15% out of your paycheck (see Reference 3). If you are close to defaulting, inquire about an Income Based Repayment or deferment. According to Credit Info Center, lenders might let you enter into a rehabilitation program to help fix your credit score (see Reference 1). Speaking with student loan lenders is an important first step in fixing your credit score.
0 comments:
Post a Comment