After my divorce a few years ago, my credit rating suffered a severe knock. I had to sell my fancy sedan and get a smaller, used vehicle. My insurance prices for my older, less costly car were double those for my new luxury sedan, which startled me. When I asked why my insurance agent said it was because of my terrible credit! It had nothing to do with my driving record (which was flawless) or tickets (which I lacked), but everything to do with my credit. I couldn’t believe it, but I was resolved right then and there to use credit repair credit cards and restore my credit score to where it belonged.
Your credit score is now utilized for much more than obtaining a credit card or a loan. A future landlord can use it to help them decide whether to rent to you. A potential employer might even use it.
With the economy in such a horrible shape these days, insurance companies are gouging consumers with increased fees and even higher interest rates if they do get a loan, all because their credit score has suffered. It’s not always your fault, either.
You lost your job, incurred unforeseen medical expenses, divorced, and so on. The problem is that banks and credit unions don’t care why; they only care about one number: your credit score.
While I’m sure many of us would agree that paying more for car insurance when our driving record is spotless is unjust, that’s the way things are done, whether we like it or not. So, barring a credit revolution, we’ll have to repair the damage to our credit score.
Here are some steps you may take to start restoring your credit and that all-important score:
1. Determine your credit score. Get a copy of your credit report from each of the three bureaus and double-check it for mistakes. Errors happen more than you might believe, and you shouldn’t be penalized for something you didn’t do! If you discover a problem, notify the credit bureau in writing right away.
2. Make timely payments on your invoices. This one thing can make a big difference. While this step appears to be simple, it may be the most difficult. If you don’t have enough money to pay all your payments on time, consider cutting back on some of your costs. I don’t know about you, but once I started serious about it, I learned that the things I thought I couldn’t live without were actually rather simple to do without. Some of the things you deem “essential” to your life may surprise you.
3. If you can’t cut costs any longer, try increasing your income. This may, once again, be easier said than done. But, a garage sale or selling old items on eBay may be all you need. Try to earn some more money to put toward your debt. The more debt you canende, the more money you’ll have to pay off other obligations.
When it comes to credit restoration, credit cards should be at the top of your list. It will take time and effort, but the sooner you begin, the better your credit score will be.