Have you ever been dismayed by the look of your credit score? Having a bad credit score can affect you in many ways, including making it difficult to purchase a car or get approved for a home mortgage.
Here are a few ways to build credit when you have a bad credit score.
Get a Secured Card
First, look into getting a secured credit card. Secured credit cards require you to pay a security deposit whenever you make a purchase. This helps to guarantee that you’ll pay off the purchase, helping you to budget better and boost your credit score. A secured credit card can help you to reestablish and improve your credit score.
If you make all of your payments on time and keep up with your credit card bills, your security deposit will be returned to you at the end of a predetermined period. Card issuers help to monitor your purchases and the security deposit keeps you accountable for the money that you spend.
Apply for Store Credit
You can also build your credit when you have a bad credit score by applying for store credit and purchasing online. If you find yourself shopping very often at the same stores, you can apply for a store credit card to help you to build credit with all of your regular purchases.
For example, you can apply for a credit card through your grocery store, since you always need to buy food and groceries. This can help you to build credit even for those weekly, essential purchases that might not be as expensive. Remember, payment history makes up 35% of your credit score.
Budget to Keep Up with Payments
You can also improve your credit by keeping track of a strict budget. Sit down and map out your expenses, creating a budget for your essential expenses as well as any money you have to spend on entertainment and fun. This can help you to keep up with your payments and improve your credit score. It can also be helpful to treat your credit card like a debit card. Only purchase things on credit that you have the money in your savings account to pay off, just like you would do with a debit card.
So, if you have a bad credit score and really want to improve it to prepare for some big purchases, remember these tips. Consider getting a secured credit card, applying for a store credit card, and budgeting to keep up with payments. These approaches will help you to better manage your expenses and boost your credit score in a sustainable way.
Did you enjoy reading this article? Here’s more to read. What You Need to Know About Electrical Transformers
