How Do You Raise Your Credit Score
There are a lot of ways to raise your credit score. It just takes a little hard work and persistence and a boatload of patience.
One of my biggest pet peeves is when I read articles about this subject and they just say things like “It’s easy! Just pay your bills on time and reduce your credit card balances and VOILA! Your credit score will magically improve.”
Yeah man. If I could do that I would have done that and not be reading your blog. I clearly need more real advice from someone who isn’t already rich to raise this score.
There are some things we are just going to have to accept right here, right now to get going on this.
- We are here for a reason.
- We know we can’t pay all our bills every month or pay them all on time.
- Our cards are maxed out and they are going to stay that way for a while.
- This isn’t magic and we can’t fix all these things happen right now.
Remember we can have anything and everything we want, just not all at once, and not without a sacrifice of time or energy.
We are not going to beat ourselves up over this. The fact that we are here and we are learning how to be better financial humans is enough. This is going to take time, and we are going to do this together. With a plan, and I have one!
Step 1: Say the problem you are facing out loud.
Determine the one area you feel is the biggest problem and get real specific with it. Don’t just say “I miss payments sometimes.” Instead, say “I missed four payments this month to three credit cards and my cable company. This is normal/not normal/the first time, etc.”
Step 2: Determine why you are facing the problem.
Now find out why you missed those payments. We know our net worth and have seen where our money goes (or if you don’t click here to figure it out in our Ultimate Guide Post). Is it because you overspend in one area? Is it because you don’t earn enough? Be brutally honest here, no lying to yourself. Write the problem from the above step and the reason from this step down on a piece of paper.
Step 3: Write down how much you are behind. The actual numbers.
Now, write down the individual amounts of the payments you missed.
Credit card 1: $65.
Credit card 2: $120 and so on.
Step 4: Renegotiate your payments with creditors.
This one is a hard one to stomach for me personally. Pride and such.
Pick up your phone and call the companies whose payments you missed.
You can find their contact information on the bills that are piling up on the coffee table or on their websites.
You are going to calmly and nicely tell the kind people on the other end of the line your situation. Say you want to make payments to them every month and you are working so hard to make that happen. Tell them you need some help and ask if they will reduce your monthly payments. Most companies would much rather you set up a plan with them for reduced payments than to miss them completely.
If you have settled an account with collections, you can call TransUnion and ask for it to be removed from your report now instead of waiting the routine seven years. It’s known as getting your report expedited. Be prepared to answer questions truthfully about why you defaulted in the first place and if they agree to remove it, your credit score could raise 20-50 points!.
Step 5: Scrap up some extra money.
That last step was the hardest, and now it’s all up to us. We are going to scrounge up the money for those reduced payments you just got. It could mean sacrificing your after-work drinks to pay that ONE bill. Or it could be something like selling some clothes on eBay or Craigslist. Even if it’s just enough money to pay on one of the accounts, we are already doing better than before.
We aren’t aiming to be perfect here, just better. But, if there was ever a time to overachieve I think this would qualify.
Walk the neighbors’ dogs or cat-sit, shovel driveways, or weed someone’s garden. Try to do as much as you can to make a few extra bucks.
Maybe it’s dire enough that you have to get a second job.
As I am writing this article, I am in this situation. I have a full-time job as a pasta maker, a part-time job as a prep/line cook, and I am building this website. I was serious when I said we were in this together.
If I can do it you can do it, babes.
It just sucks.
I haven’t had happy hour in months…
I would kill for just five to twelve gin and tonics.
But it feels so good when I get to see my debt go down and my credit score rise.
Remember that every time you make a payment on time or put extra towards your debts and reduce your debt to credit ratio, you are raising that score. It takes some time and the results aren’t immediate, but it is happening.
Don’t get discouraged trying to raise your credit score
I realize I used missed payments for this example, but the outline will work for a variety of situations. Missed payments are super common, but if the problem is a credit to debt ratio, this will still help. By following the steps you can identify the problem, set the problem as a new goal to tackle, understand why the problem is occurring, and then negotiate with creditors to lower payments, interest rates even and start plugging away on the plan!