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Approximately 30% of Americans have poor or bad credit, reports Credit.com. If you’re one of them, you’ve got company, and you’ve got nothing to be ashamed of.

Poor credit makes it tough to qualify for a credit card, score a low-interest rate on a car loan, get approved for an apartment, or land a job. It could even affect your ability to get car insurance with some companies. (Psst! But not Direct Auto & Life Insurance!)

While you can’t wave a magic wand and make your poor or bad credit history disappear, you can fix your credit situation and put yourself on the road to financial stability. Start digging yourself out of a bad credit situation by following these six steps.

6 Steps Toward Better Credit 

  1. Establish a household budget.

 Yes, it’s tempting to buy that awesome pair of shoes or cool electronic gadget you find online.

To fix your credit, though, you’ve got to fix your spending habits. Repairing your credit means sticking to a budget that focuses first on meeting your everyday needs, such as housing, utilities, food, and clothing.

Read about these tips on setting up a household budget.

  1. Put away your credit cards.

As you work to control your spending, resist putting purchases on your credit cards. Instead, concentrate on paying off the balances. Here are two ways to do that:

  • The debt avalanche approach: pay off the debt with the highest interest rate first, then work your way down to the debt with the lowest interest rate.
  • The debt snowball approach: pay off the debt with the smallest balance first, then work your way up to the debt with the highest balance.

Keep in mind that you still need to make payments on all of your debts while using either of these two methods.

By the way, as you’re working to improve your credit, it’s best not to open any new credit card accounts. The smart thing to do is work on wiping out the debt you already have on your existing credit cards. 

  1. See a credit counselor.

You’ve heard of marriage counselors, right? Well, some counselors can help you repair your relationship with money, too.

Credit counselors with the nonprofit National Foundation for Credit Counseling work with consumers to review their finances and come up with solutions for issues surrounding credit card debt, loan debt, housing expenses, money management, and other financial matters.

Find a nonprofit credit counselor in your area.

  1. Pay your bills on time.

Wondering how you can build credit? This is a great place to start early. If you’re late with payments on credit cards, loans, and other debts, even by a few days, this can damage your credit score. FICO, the largest provider of credit scores in the United States, says payment history makes up 35% of your FICO score.

  1. Know your credit score.

Many Americans don’t know their credit score or don’t even have a credit score at all. That can make it pretty hard to fix your credit.

To get a sense of your financial situation, find out whether you have a credit score and, if so, what your credit score is. Typically, credit scores range from a low of 300 to a high of 850. These days, many credit card companies, banks, and other financial companies offer free credit score checks online.

You should also take a look at your credit reports. They will give you a clear picture of your entire credit history, including whether you’ve made any late payments. Under federal law, you’re entitled to a free credit report once a year from the three credit-reporting bureaus: Equifax, Experian, and TransUnion.

Get your free reports.

  1. Reach out for help.

You don’t have it do it alone when you’re trying to fix your credit.

There are lots of companies that work with people who have poor or bad credit to help them build or rebuild their credit. For instance, several companies offer credit-rebuilding loans that help consumers establish positive credit histories.

You can put Direct Auto & Life Insurance on that list of companies, too. We work to find affordable car insurance for all drivers, including those with poor or bad credit. Call 1-877-GO-DIRECT (1-877-463-4732), click to get a quote online, or come into a location near you for help today.

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