Worried about your credit score? You are not alone. Whether you’ve been struggling since COVID-19 hit or your finances and debt are just growing too much, here’s what you need to know:
What is a Credit Score & Why is it Important?
This is a very important number to know. Your credit score shows you know where your credit stands and what if anything is impacting it negatively. It shows if you are considered a risk as a borrower. You can get your free credit report from each of the three major credit bureaus (Equifax, TransUnion, and Experian) each year through Annual Credit Report.com. Be sure to dispute any inaccuracies on your credit report. If you have a legitimate dispute, the credit bureau is responsible for investigating and giving you a response. Remember, it will not count against you to get your own credit report annually.
An excellent score falls within the range of 781 to 850 and a good score falls within 661 to 780. For more information on scoring: click here.
Looking For More Ways To Improve Your Credit Score?
Contact our office today to discuss the best options for handling your debt and improving your credit score.
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 or an emergency. 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 or other emergencies.
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.