In the spirit of contribution, collaboration and community, I am pleased to bring you this, the first of many partnership interviews with experts I love and trust to improve the value of your home.
5 Steps Towards ReEstablishing Your Credit
This is the year you decided to buy that first home. You’ve done your research and have your things in order except one thing. Your credit isn’t so great. Rebuilding your credit isn’t an overnight thing, it’s a process and sometimes a long one. With these steps and a little work, we’ll have you on the road to credit recovery.
1. Pay Your Bills On Time and Reduce Extra Spending
Spend a little time creating a budget and sticking to it. Make sure your bills are paid on time because just one late payment could cost your points on your credit score. Try not to spend more money than necessary so there is some available for emergencies and unexpected bills.
2. Talk to Your Bank
Ask your bank about a secure credit card. A secured card is a credit card that you can use but is backed by the amount of money you put into your account. Your credit limit is the same as the amount of money you deposited when you open the account. This works differently than a debit card because your activity reflects toward your credit, while a debit card does not. After some period of time, usually a year, of positive activity, your bank may issue you a non-secure credit card.
3. Secure a Higher Interest Credit Card
No one wants to pay high interest rates on credit cards, but your chances are better at securing one of these than a lower interest one. You can avoid interest charges by charging no more than you can pay off within a month. With any card, be sure that the card you apply for isn’t also charging you an annual fee.
4. Consider Using a Credit Union
Since credit unions are much small than the big name banks, they tend to be more personal. Getting a loan from a credit union is a little easier than a larger bank, especially for those with suffering credit.
5. Take Care of Those Collection Notices
Call the collection agency sending you those notices. Most agencies are willing to set up payment arrangements and some will even knock off a chunk of what you owe if you take care of it right away. The best time to call and negotiate with a collection agency is at the end of the month. Make sure that you also negotiate the collection account off of your report when you make that payment. There is little difference between a collection account that is active and one that is paid – it’s still a collection account. It takes time for those accounts to fall off of your credit report and raise your score.
Sam Lepore is a Realtor with Keller Williams in Moorestown, NJ. Call him today at 856.297.6827 ....