Building your credit from scratch or improving your existing credit can seem like a daunting task and improving it quickly can feel even more impossible. These three ideas can help you boost your score and increase your reliability in the eyes of financial institutions.
Credit Builder Loans
This type of loan offers the benefit of small monthly payments and is meant to help you qualify for other loans in the future. Credit builder loans also do not require that you have a good credit score for approval. In addition to improving your credit score with timely payments, this type of loan allows you to accrue savings. A lender will deposit the loan amount into a savings account that you, as the borrower, will receive after the loan has been paid in full.
Secured Credit Cards
When you open an account for a secured credit card, the cash deposit you make will match your credit limit. For example, a $500 deposit will give you a $500 limit. Secured cards are used the same as unsecured cards and offer lower fees. Charging small purchases and paying your bill on time will allow you to get your initial deposit back as well as boost your credit score.
Paying on Time & Making Micropayments
Making payments on time is the number one way to improve your credit score. Overdue bills can quickly impact your score for years and it can be difficult to climb back out of that hole. Another way to build your credit when making payments is to make small payments throughout the month, also referred to as micropayments. This positively affects your credit score by not allowing your credit utilization to build before a payment’s due date.
Finding the Right Institution
If you have any questions about your credit score, or how you can improve it, visit SavvyMoney on your online banking profile or give us a call at 303-459-6660.