How to Build, Boost Your Credit Score
SAN ANTONIO – If the pandemic resulted in late or skipped bill payments, your credit score could have been affected. But there are ways to create credit the right way, according to Consumer Reports.
Credit scores impact so many things, including insurance premiums, mortgage interest rates, and auto loans. Thus, millions of people with very low credit scores or no credit at all may face challenges.
“A bad credit can also make it difficult to rent an apartment, go to college or even get a job,” said Lisa Gill of Consumer Reports.
The catch is, in order to build credit, you have to have credit. And it’s hard to get credit if you already have bad credit.
Consumer Reports offers these ways to improve your credit score:
Open a bank account, maybe with a credit union, and take out several small loans. Make monthly payments on time, and it should improve your score over time.
Consider applying for a secured credit card. This means that it is backed by a cash deposit held by the credit card company. Use it and make payments on time.
Another option is to ask a loved one with good credit to add you to their credit card. This is not always a good idea, as it can strain relationships. A missed or late payment can hurt both credit scores.
Borrowers with outstanding debt should pay it off as soon as possible and pay all bills on time to avoid collections in the first place.
“Once you’ve paid off any debt in collection, many credit scoring systems won’t weigh them down heavily when calculating your score,” said Gill.
Be sure to check your credit report and dispute any errors by sending a certified letter with proof to the big three credit bureaus, Experian, Equifax, and Transunion.
Experian allows consumers to join its Boost program. Paying utility bills, cell phone bills, or even Netflix bills can help improve scores, if only slightly.
Consumer Reports cautions against any credit repair service that promises a quick fix for a fee. You don’t have to pay to improve your credit, but it does take a solid financial plan and time.
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