Are your credit scores with the three major bureaus less than stellar? If so, you’re not alone because millions of working adults are not in the top half of the scoring brackets. The reasons are varied, but for the majority of those whose scores are not great, the culprit is either over-use of credit or slow payment of bills. Of course, there are many other ways to harm your status, but those are the most frequent offenders.
The smart thing to do if you have the desire to boost your numbers with Equifax, TransUnion, and Experian is to get busy right now fixing the situation. While they’re extremely similar in structure, each one has its unique, and usually secret, ways of assigning particular ratings to individuals. The good news for consumers is that there are some clear-cut tactics for boosting ratings across the board with all three bureaus.
Besides the obvious advice from financial advisors, pay all your bills on time, and keep your credit card information secure, there are some excellent workarounds for obtaining loans even if your ratings are not very good or if you have no credit history yet. Consider correcting any mistakes in the reports, hiring legal help to clear incorrect or unfair listings, negotiating with creditors to pay off high balances or remove negative citations, getting a secured card, refraining from applying for new cards, and living within your means. Here are pertinent details about effective strategies for boosting your scores and getting through life with less-than-perfect credit ratings.
Improve Scores ASAP
Fortunately, there’s a pretty specific laundry list of actions you can take to boost bureau ratings. They include paying all financial obligations on time or early, keeping card usage as low as possible, not relying on cards for regular expenses, not moving too frequently, and annually checking your reports from all three bureaus to see how much progress you’ve made. Note that, by law, every consumer gets one free report from each reporting agency annually. But you have to contact them and ask for it. Set a date each year to remind yourself to request the reports. Then, use online resources to decipher the odd language and code so you can understand all the jargon and get a glimpse into your current status.
Use a Cosigner for Student Loans
What if you have no payment history at all but want to attend college? The smartest way to obtain a student loan to cover the cost of tuition, books, and fees is to get a cosigner. Many future college students who have no credit history or a thin credit file wonder do you need a cosigner for student loans? It’s a relevant question. In most cases, the answer is yes. Having a cosigner means you’ll have a much better chance of being approved for the college loans you apply for. Not only does a cosigner help with approval, but the borrower can get much lower rates and better terms than if they applied alone. Using a cosigner is an ideal way for credit-challenged young adults to reduce the total amount they’ll end up paying for their loans.
Correct Errors in Reports
People are usually surprised to learn that Equifax, Experian, and TransUnion make mistakes. They’re responsible companies that have been around for decades, but it’s relatively common to discover listings on your report that are either for the wrong amounts or are not related to your financial activity at all. The bureaus are good about removing mistakes as long as you do two things: contact them and ask for removal and provide documentation to back up your claim.
Consider Legal Help
Lawyers with experience in this field can help you negotiate with creditors. Legal fees are modest compared to what you might gain from a negotiation. While consumers can negotiate independently, trained lawyers have a much better record of obtaining results in a shorter amount of time. There’s no guarantee that creditors will agree to settle for a lower amount than the full debt, but in many cases, they are happy to write off the item for about half of the total obligation.
Get a Secured Card
Check online for reputable financial institutions that offer secured cards with low fees. Most have opening minimum balances of around $500. They’re an effective way to build up a payment history. Make sure to find out that the issuing company reports to all three bureaus. That way, when you use and pay off your secured account each month, you’ll slowly build up a solid payment history and support better scores and ratings. Nearly all secured cards do not report your application to the bureaus, so there’s no need to worry about a ding to current scores. Beware of scammers and fraudsters in the secured niche. Several of the top consumer assistance organizations post lists of the top products in this niche, so use reputable information sources for the best results.