Staying on top of your finances is easier said than done. Budgeting, reducing spending on luxury items and overall monitoring of expenses is needed to maintain financial stability. A credit score is direct proof of your capability to pay off your debt through credit. 6 months is the usual amount of time it takes to develop your credit score. Having a bad credit score can affect your chances of obtaining loans, residence, or credit card benefits.
As time goes on, you may find yourself struggling to maintain a good credit score. Unexpected events such as a car accident or a natural disaster can leave you financially handicapped. If your credit score starts slipping into unforgiving territory, your ability to obtain a mortgage can be affected. Your credit score is one of the most important factors in determining if a lender will loan you money or not. If you do not have a good score, then you probably will not qualify for a mortgage. If you find yourself with a bad credit score, while looking for a mortgage, there are steps you can take to help improve your situation.
Rent Reporting Services
Rent reporting services allow you to present the rent you pay toward your credit history. This allows you to establish a solid history of credit payments, by adding your rent payments record with your credit history. Services such as Rental Kharma have helped people increase their score in a as little as 2 weeks. Rent payments are not applicable for all credit scores. Consult your credit bureau before using a rent reporting service.
Credit Builder Loans
Credit builder loans are designed to help people who wish to enhance their credit score. Your credit score is not considered when issuing these loans, but you must have an income that allows you to pay these loans back on time. Credit builder loans lock the amount borrowed in your account. You can access the money, once the loan payment has been cleared. This system prevents the borrower from spending until their obligations are met. Credit builder loans are offered by most credit unions or community banks.
Become a Co-Signer
Co-signing on a friend or family member’s credit card will allow you to develop your own credit score. As long as payments by your friend or family member are met, your credit score can improve. There are risks that come with co-signing. If payments are not being made on time, you will be accountable to pick up the slack as the co-signer.