How To Do Credit Repair Responsibly
July 7, 2021 | June Mckaig
Your credit score is a metric used to track how responsible you are with your money. It helps lenders understand whether or not they can afford the risk of working with you, and can impact your chances of approval for a new account or loan. It can also affect interest rates and payment plan options.
Needless to say, you need to know how to do credit repair responsibly. Here’s how to build your score from scratch, or get it back if it’s been damaged.
What Your Credit Score Is Made Of
Your credit score is comprised of five major categories. These are the things that make up your credit score:
- Payment history (the largest part of your score)
- Debt amount versus credit available
- The length of your credit history
- New credit
- Credit mix (the kinds of credit you currently use)
A healthy credit score has a consistent payment history. It also has a low debt percentage, long credit history, minimal new credit, and a good mix of revolving credit such as credit cards. And it even includes installment credit like mortgages and loans. So, building your credit and credit repair strategies focus on keeping all of these factors balanced.
How To Build Your Credit
As a new credit user, it can be difficult to get any kind of loan or reasonable interest rate on things like insurance. It’s important to begin building as soon as possible. Here’s how to build your credit using one of the most common methods: a credit card.
- Open a credit card. There are many credit cards that are tailor-made for building your score. You can also choose a low-impact store credit card, as these generally have higher approval rates. If you have a trusted person with an established credit card, you can ask to become an authorized user on their account.
- Use that card. Use your card regularly, for everyday purchases like groceries and gas. Try not to hit your maximum credit limit. Instead, you’ll want to hover at less than 30% of your total credit in use at any one time.
- Pay your card off. Pay these small purchases off in full every month if possible. You might even pay them off on the same day that you make them. Make payments on time, every time; if possible, automate your payments so it’s impossible to miss one.
If you’re not willing to get a credit card, then you can use a loan to do something similar. Take out the loan, set a recurring monthly payment, and pay it off over time. Going this route might be preferable if you’re unsure about self-control when it comes to your spending habits.
The important thing in either strategy is consistency. Credit repair and building take time, so be patient and keep at it; as your score rises, you’ll have more opportunities to add different kinds of credit, which can raise it even more.
A Simple Credit Repair Guide
Some serious life events can cause damage to your credit score. A lapse in payment or a case of fraud may bring your score down significantly. Luckily, bad credit repair isn’t impossible. Here’s how you can do some easy credit repair.
- Assess your situation. Get your credit score from all three major companies and assess. Is there any fraud or outdated information? Are there any payments you’ve forgotten about or haven’t gone through for any reason?
- Correct any misinformation. File dispute claims with the appropriate agencies to get incorrect or outdated information removed from your score. If there is any fraud, file reports to the FTC.
- Protect your information. Sign up for a credit monitoring system to keep an eye on your scores more closely and prevent misinformation from happening again. If there has been a fraud, take measures to secure your accounts.
- Make a plan for your current debts. Sort out which ones you can pay off immediately and which ones you can set regular payments for to pay off over time.
- Pay your debts. Pay off what you can and keep up with at least the minimum payments, make payment plans in place for the others.
Once you’ve done that, it’s really only a matter of waiting for your score to improve. This may take months, or even years, so be patient and keep up healthy credit habits to prevent your score from falling again.
How A South Carolina Title Loan Can Help With Emergency Expenses
Sometimes when you are busy fixing your credit, emergencies pop up and derail your progress. And sometimes those emergencies cannot be put off. When that happens, you can turn to a South Carolina title loan to help you out.
A South Carolina title loan uses your vehicle’s lien-free title as collateral for a lump sum of money. While this loan won’t directly help with your credit – since it is a short-term help – it can help get rid of emergency expenses. Once those are out of the way, you can go back to fixing your credit. The best part is you can qualify even if your credit is poor or nonexistent.
Another benefit to this loan is you don’t have to give up your vehicle. We here at Carolina Title Loans, Inc. will keep your vehicle’s title while you repay the loan – not the vehicle itself. You can keep using it as you see fit while you repay the loan.
How To Get A Title Loan In South Carolina
The process of getting a South Carolina title loan from Carolina Title Loans, Inc. is simple to understand. To begin, go to our website and fill out the online form. This form sends your basic information to the nearest location and allows a loan representative to give you a call.
Once you are off the phone, you can grab your driver’s license or state-issued ID, your vehicle’s lien-free title, and your vehicle and travel to the nearest car title loan place. And if you’d rather not come to the store, you can have the loan representative come to you. Either way, you have to have these items.
The loan representative will inspect your vehicle to determine how much you could qualify for and then assess if you qualify for approval. If you do, they will go over our loan terms and help you finish the paperwork. Once everything is complete, you will get the money either the same day or the next bank business day.
Make Credit Repair And Creation Possible
Your credit score doesn’t have to be complicated or concerning. All you need to build and maintain your credit – or perform credit repair – are better money habits, a diverse credit portfolio, and the patience to wait for it to build up. If you’ve got that, a good credit score is only a matter of time. And if you need help with emergency expenses, fill out our online form for a title loan.