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IMPROVING YOUR CREDIT SCORE
Having a bad credit history can come back to haunt
you when you look obtain a loan for a
home loan
or
car. Not only will your bad credit effect the amount
you are approved for and the interest rates and terms you
receive, your poor credit can jeopardize your chances for
approval. Learn more about
how credit is important.
Before applying for any type of loan, you should always
get a
copy of your credit report.
If you don't already know how to, you should learn
how your credit score is calculated and
how to read your credit report.
Below are some tips that will help you improve your
credit score.
Open a Bank Account
Bank accounts are not present on your credit reports.
However, when you apply for any type of loan or credit,
your bank account number may be required.
Never overdraw on your bank account. Meaning, don't write
checks for monies that you do not have. This will result
in bounced checks. When you bounce a check, the bank will
charge you a fee, as well as the creditor/company you
made the check out to. Bounced checks are negatively
reflective on your credit report.
Apply for a Credit Card
Using a credit card is a great way to build your
credit. Click the link to
apply for the
Orchard Bank credit card, a card that is specifically designed for
people with bad credit, or no credit looking to
rebuild or establish their credit. Another card we
suggest is the
Tribute Gold MasterCard. Both of these credit
cards will report your payments to all three of
the major credit bureaus every month. Learn more about
the
bad credit and no credit cards we feature.
When you use your credit card, you must make sure that
you make your payments on time every month. Using your
credit card in a responsible manner for a few months will
give you the opportunity to apply for a credit card that
is more geared towards people with good credit.
Specifically, offering lower interest rates. These credit cards
offer more spending power by way of higher credit lines.
Be careful! Having a larger credit line opens the door for
irresponsible spending.
Bear in mind that having a $7500 credit line does not
mean you have $7500 of extra money to use at will. It is
just an alternate method for spending your cash.
Formulate a plan for using your credit card.
Specifically, you want to be certain that any items you
buy, you can pay for at the end of the month when you
receive your statement. A good practice is to right down
your income and what your expenses are. Your left over
cash is the 'extra' money you have to use on buying goods
with your credit card. However, don't look to spend all
of your additional money. You should always look to
save some money in the bank every month.
Never let anyone use your credit card! Not even family!
Suppose you get into a fight with the person you let use
your card, and they decide that they are not going
to pay
what they owe you, you are still responsible for all of
the charges they made!
Never give anyone your credit card number over the phone
or internet unless you are the one that has started the transaction.
Never utilize the cash advances that are offered by
credit cards. The credit card companies charge an upfront
fee ranging from 2 - 4% of the amount you are borrowing.
The interest rates for cash advances are high, usually in
the teens. Also, there are no grace periods when dealing
with cash advances.
Credit Improving Fact:
If you have bad credit, and you are looking to apply for
an auto loan, the
auto loan rates your receive will be higher than if
you have no credit.
More helpful information for understanding credit
reports:
Getting Your Credit Report Regularly
Educating Yourself on How Your Credit Score is Determined
Understand the Information in Your Credit Report
Correcting Inaccuracies on Your Credit Report
Life's Occurrences That Affect Your Credit Rating
The Impact Of Having Your Credit Pulled On Your Credit
Report
Correcting Errors
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