Sometimes unforeseen events happen. You need money and you need it now.
Lines of credit can provide a safety net in emergencies.
Sadly, some people never recover and their credit score plummets.
Sound like you?
Living with poor credit scores isn’t easy. Almost every big step in life requires a good credit score.
If your credit score has taken a dive, don’t fret. You can still recover.
In this article, we’ll go into the top five ways to repair bad credit.
What Is a Bad Credit Score?
A bad credit score is considered anywhere between 300-499. This can be a result of unpaid minimum monthly payments, high balances on a credit card, or even lack of credit history.
How to Repair Bad Credit
Learning how to fix your credit can be overwhelming, but we’ve simplified into five different tips.
The Snowball Method
A method popularized by financial guru Dave Ramsey is a great way to start paying off overwhelming debt.
You begin by identifying the credit card with the smallest balance. Whatever the monthly payment is, double it, and begin paying it off quickly.
Once that card is paid off, use that extra cash and contribute it towards the next lowest balance card.
Repeat this until all of your credit cards are paid off!
Secured Credit Card
A secured credit card uses an initial downpayment to establish a credit line. This gives banks collateral to ensure they don’t lose money, should you not be able to pay off your debt.
This is an ideal solution to establish credit history and increase your available credit, which is a determiner of your credit score.
If you don’t have the money for the initial deposit for a secured credit card, there is still hope.
The Surge Mastercard is designed to help people with poor credit begin their credit score repair when used correctly.
While this does provide a line of credit, it shouldn’t be used for large expenses.
Use a Credit-Builder Loan
When searching for how to fix your credit score, a credit-builder loan may catch your eye.
Credit-builder loans require you to make on-time payments while your loan remains in the bank. Once you have completely “repaid” the loan, you gain access to the money. It’s similar to a savings account except you don’t have access to it until you’ve deposited a certain amount of money.
Check For Errors
Faulty reports on your credit can be a serious downer for your credit score.
Use apps like Experian, Credit Karma, and the like give you the opportunity to check your credit score in depth while getting access to the details of what’s impacting your credit score.
Boosting Your Credit Score Is Easier Than You Think
While overwhelming debt can be seemingly insurmountable and trying to repair bad credit is a lost cause, making a plan and utilizing these five tips can help you take that first step to debt freedom.
Boosting your credit score is just the beginning and learning how to make some extra money may be next on your list.
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