Today your credit score can be used for far more than just getting a credit card or a loan. It can be used by a potential landlord to help them determine if they want to rent to you. It can even be used by a potential employer.
With the economy in such a bad state these days more and more people are getting gouged by insurance companies with higher fees and much higher interest rates if they do get a loan, all because their credit score has taken a hit. In many cases it's not even your fault.
You lost your job, had unexpected medical bills, got divorced, etc. The problem is that the banks and credit unions don't care why, they just look at that all mighty number: your credit score.
While I'm sure many of us would agree that it's not fair that we have to pay more on car insurance when our driving record is clear just because we have some dings on our credit, whether we like it or not that's the way it's done. So, short of a credit revolution, we have to repair the damage that has been done to our score.
Here are a few things that you can do that will start you on the path to rebuilding your credit and that all important score:
- Find out your credit score. Get a credit report from all three bureaus and check them over carefully for errors. Errors are more common than you'd think and you shouldn't pay through the nose for something you didn't even do! If you find a problem contact the credit bureau immediately, in writing.
- Pay your bills on time. This one single thing can go a long way. This step, while seemingly easy, may actually be the hardest thing to do. If you simply don't have enough money to pay all your bills on time try to cut back on some of your expenses. I don't know about you, but when I got serious I realized that the things I 'couldn't cut back on' were actually pretty easy to live without. You may be surprised at some of the things you consider 'vital' to your life.
- If you can't cut back on expenses anymore try to increase your income. Again, this may be easier said than done. But something as simple as a garage sale or selling some old stuff on Ebay may be all you need. Just try to get some extra cash that you can apply to your debt. The more debt you can pay off the more money you'll free up to put towards other debt.