Credit scores can have an impact on everything from the interest rate you pay on a mortgage loan
or credit your insurance premium. So imagine what it is for the millions
people who have no credit history or a very low credit rating.
“A bad credit can also make it difficult to rent an apartment, college or even get a job,” said Lisa Gill. Consumer reports.
If you want to increase your credit, you have to get credit.
An important first step is to open a bank account, take out several small loans, and make monthly payments on time, which should improve your score over time.
Next, consider applying for what is called a secured credit card, which means you have secured the card with cash. You can also ask a family member with good credit to add you to their credit card. Just make sure you have a good relationship with the person because if you miss or are late with a payment it can ring both your notes.
And if you have a debt that is in the process of being collected, pay it off ASAP and make sure you pay all of your bills on time to avoid collections in the first place.
“Once you’ve paid off any debt in collection, many credit scoring systems won’t weigh them down heavily when calculating your score,” said Gill.
And be sure to check your credit report carefully. Dispute any mistakes you might find by sending a certified letter with proof to the big three credit bureaus. They have about 30 days to respond.
Consumer Reports said to be wary of any quick credit service that offers help for a fee. You don’t have to pay to repair your credit. It just takes a solid financial plan and some time.
AFTER: How To Fix Your Credit Score