Ginko Financial

If your credit score has taken a hammering in recent years due to any number of things you will want to see what measures you can take to rebuild your score cheaply.  All sorts of things can affect your score such as bankruptcy, foreclosure, late repayments, the amount of money you owe and how many types of credit you have.  If you don’t know what your credit rating is then this is the firs thing you need to do.

Go to annualcreditreport.com and apply for all of your credit reports.  This is totally free of charge and you can do this once a year.  When you get the reports you requested then you can have a look at them and see everything that is listed.  Make sure that all the information there is correct because if it says you have loans, credit cards or bank accounts that you didn’t apply for then you should tell them of these errors.  Just doing this might increase your credit score so it’s a good idea to do this. You should also look at Fico Scores/Reports which will tell you your FICO score.

Now that you know what credit score you have one of the popular techniques is to get a secured credit card.  Basically you deposit an amount of money with the card issuer and if you don’t pay your credit card bill on time the issuer can take the amount you owe out of the deposited amount.  The more you deposit with them the more credit you will be allowed.  Just make sure you do pay on time otherwise it’s a waste of time and could make your score worse.  So you might decide just to spend a small amount on the secured credit card every month in order to be able to afford to pay it off.

There are also credit cards for those with bad credit but make sure you know exactly what you are getting and what fees might be associated with the card.  Because you have bad credit you will probably have to pay a much higher interest rate than those with good credit.  However if you plan on paying your credit card bills every month in full then it shouldn’t be a problem.  So just spending a small amount such as $20 for groceries is a good idea.  If you go crazy buying all sorts of different things you might find it difficult to pay it off and then you’ll end up paying a lot more for your goods then you should.

Students who don’t have any real history of using credit cards or taking out loans can build up their credit rating by applying for a student credit card.  These can be obtained from your bank, on the internet and also by applying on your college campus.  There are many different benefits being offered by the card companies so make sure you have a look at them all and don’t simply take out the first one you see.  Some may offer loyalty points, low APR for those who pay promptly and also a 0% interest rate for the first 6 months.

Be very careful about opening and closing accounts just for the sake of increasing your credit score.  This doesn’t always work and might make things even worse.  Only apply for bank accounts and credit cards if you genuinely need to.  Also, if you see special introductory rates for new customers try not to be too tempted by them.  Sometimes people more credit card balances from one old accounts onto new accounts just to take advantage of the low interest rates for new customers.  Doing this once or twice is OK but if you do this time and time again it will lower your score.

Overall, you need to change your attitudes towards money.  Often those with awful credit scores are just bad at managing their money.  They have got caught up in a trap where they think it’s OK to “buy now pay later,” however it does catch up with you.  Many times if you buy an items whether it’s a computer or a washing machine the sales guy will ask you if you want to take out finance.  It’s “only” $50 a month after all.  However if you end up buying 10 things all at “only” $50 a month that ends up being $500 which may be a lot of money to you and cause you do default on your repayments.  So take this as an opportunity to change the way you think about money and save up for what you want rather than to take out loans.