Family Tips for Improving Your Credit Score

Even if you stay away from borrowing and feel comfortable operating within a strict budget, you still need enough credit. Unless you’re independently wealthy, some things will remain beyond your checkbook. Things like cars, houses, starting a business and even trying to get a job require a strong credit score. If mistakes have damaged your score, we all make them; the following family tips will help you undo the carnage and rebuild a respectable credit score.

Credit Scores: Low to High

Every lender that offers credit sets their limits for what they consider good credit. If you have a low score companies will either deny you altogether or charge you the highest interest rates possible. Lower scores and higher rates mean significantly more money out of your pocket over the term of the loan. That increased expense is unnecessary.

Here’s how scores operate at the different levels:

• 300-580 – refused or hammered with high-interest rates.
• 581-650 – you will gain approval but interest rates will be high
• 651-710 – a more acceptable range, more reasonable rates
• 711-750 – now credit companies will often compete for your business, and that means lower rates
• 751 and higher – you have earned your gold status and will receive the best rates possible

How to Fix Your Credit

Raising your credit score is easier than you might think, although if you have a recent bankruptcy or another type of serious problem on your credit record, the healing will take considerably more time. Without the big problems, you can see progress in as little as a couple of months by following these family tips.

 

• Find out where you stand. Check out the big agencies and ask for a copy of your credit report and remember you’re legally entitled to a free copy once a year. Look for mistakes and clean them up.
• Find a way to pay down credit card debt. Perhaps you could borrow from a family member to reduce the debt on your report. Paying your bills on time is critical. Late payments are a major red flag to lenders.
• If you have old cards that you never use, do not close the accounts. Closed accounts look bad to creditors. Instead, use them every so often for small purchases, pay the balance quickly, and begin building a respectable reputation for managing your credit. The longer your positive history, the better your credit scores.
• Keep your credit card balances below the max. You’re better off to have three cards with lower balances than one that is maxed out.
• If you continually try to get a credit card and are denied, try applying for a secured card. Spending a few dollars up front will help you begin building a solid credit history. Another good way to build credit is to apply for a gas card. Gas station cards are often easier to get and pay off each month, thus evidencing money management skills on your credit report.

Families experiencing financial trouble are under stress, and the situation can wreak havoc with everyone concerned. New York family lawyers all have the same opinion that the number one cause of divorce is financial problems. Getting out from under credit debt and repairing your credit score will help alleviate the stress associated with the feelings of pending financial disaster. Every family member will rest easier. It is not difficult to repair credit, but it does take some thoughtful effort and discipline. Follow these family tips and you will be okay.

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