Step One
Working on your credit
As an accountant, tax professional and realtor I cannot emphasize enough how important is it for us to pay attention to our credit scores. Life happens, it’s totally understandable when unexpected things negatively affect our credit scores. There are also instances where individuals are victims of identity theft which can cause long term damage. Each year taxpayers are entitled to one free credit report. These often can be provided through credit card companies or financial institutions. Also, there are companies such as creditreport.com, and Experian.com (just to name a few) that allow monthly monitoring for nominal fees.
Where to start?
Get a copy of your report. As a consumer running your own report will not have a negative impact on your score, this is what’s considered a ‘’soft inquiry’’. It’s only when you have ‘’hard inquires’’ such as those used in credit approvals and background checks that potentially bring your score down.
If you see negative things on your credit this is the perfect opportunity to dispute those items. Having them removed can increase your score. If you do not have the time or do not know how to dispute those items yourself there are MANY affordable credit repair specialists out there.
Bills.
If you have not been doing so, start paying your bills on time. Late payments bring down your score and late payments are red flags to lenders. Remember, a lender is ultimately looking for your ability to payback your debt.
Credit card balances.
If your balances are high start focusing on paying them down (there can be a bit of strategy to this so be sure to consult with a lender for best results). Example, if you have two credit cards with high balances one with 24.99% APR and the other 14.99% APR, it’s best to first focus your attention on the card with the highest interest rate. The goal is to establish a plan that minimizes the amount of interest that you pay. Though it’s great to pay off your cards completely sometimes it’s not always realistic. In those cases, pay down your debt to a reasonable balance and consult with a lender on the best next steps to take to help you qualify.
Some might say, their issue it’s having too much credit it’s actually not having any credit at all. In those cases, there are low limit $250-$500 secured cards that can be obtained. Talk to your financial institution about your options.
If you have any unanswered questions on where to start – here to help!
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