The credit score is a consumer’s lifeblood. Consumers with good credit can easily obtain loans with fantastic interest rates. A bad score can cost thousands of dollars over the life of a loan. While weak credit cannot be fixed overnight, concerted effort over time can increase a poor score. Here are three great ways to build credit:
1) Use a prepaid visa card. These cards are pre-loaded with money and won’t work unless they carry a credit balance. They are as convenient and safe as credit cards without the late fees, interest payments, and other charges. Secured credit cards not only teach the consumer good financial habits, but can also build credit history. For those whose credit prevents them from obtaining a regular credit card, a prepaid visa is a great stepping stone to financial health.
2) Obtain a credit report and fix incorrect information. Even small reporting mistakes can mar an otherwise solid credit history. Everyone can obtain one free credit report from each credit agency each year. Consumers should check their credit reports for false or incorrect information. Disputing these mistakes with the credit could significantly bump up a credit score. One place where you can get a credit report is at annualcreditreport.com, which gives you options for all three bureaus.
3) Obtain the services of a credit counseling and monitoring agency. These organizations will work with consumers to create a budget and financial plan to nurse credit back to health. A credit monitoring agency will continually update the consumer on any changes to his or her credit report. Monitoring keeps the consumer on top of his/her report while also providing protection against identity theft.
The truth is that there is no quick fix, but a solid history of responsibility use can go a long way when you’re looking to use that credit.