Help, My Credit is in the Toilet

If your credit is in the toilet, you’ve most likely figured out how poor credit can affect the rest of your life. It can keep you from getting a job, finding a place to live and getting a loan for the things you really need. Fortunately, it can be fixed. Depending on how bad your credit is, the repair process could take a year or more. But if you stay focused and committed, you’ll only need to do this once in your lifetime. Here are some steps to help you repair your credit.

Pay Your Bills On Time
Every time you are late 30 days or more on a credit card or loan payment, your credit score goes down. Even if you’re just paying the minimum payment right now, pay it on time every month. This alone will make the biggest difference to your credit in the shortest amount of time. Whenever possible, pay more than the minimum payment.

Credit Counseling
If you can’t afford your monthly payments, use the free financial counseling service, BALANCE,  at Neighborhood Credit Union. Or, seek free counseling from the Consumer Credit Counseling Service of Greater Dallas to see if you qualify for their debt management program.

Stop Using Your Credit Cards
Unless you can afford to pay the full balance each month, cut up your credit cards so you’re not tempted to use them. You might save one for emergencies, but don’t carry it in your wallet. Some people actually store their emergency card in a block of ice in the freezer to keep from using it on impulse.

Review Your Credit Report for Mistakes
Negative activity on a credit report will lower your credit score, even if it’s inaccurate. Get a free copy of your credit report at annualcreditreport.com and review it carefully for errors or misleading information, accounts that are not yours, bankruptcies over 10 years old, negative information over 7 years old, etc. Report any errors to the credit bureau for investigation.

Open a Checking and Savings Account
Even if you keep low balances in your accounts, creditors can see that you have the means to pay your bills and are making an attempt to change your ways by saving money. If you have negative history with previous financial institutions, consider our Fresh Start or Second Start accounts to get back on track.

Stay the Course
Repairing your credit often feels like you’re running in place. Just remember that every small change you make is adding up to bigger changes down the road. It also helps to think of your credit as a work in progress. As you make gradual changes, your score will continue to increase.