Credit Score

Debt management plan to rebuild your credit score.

Your score improves with wise use of credit.

• Add positive information to your credit history. Some creditors may not report your credit history. Before opening a new account, ask if your on-time payments will be reported to the credit-reporting agency

• Mind all the bills… a late payment on one account could cost you higher rates and fees on all your accounts.

• Keep the accounts current and save your credit rating. Be proactive with any problems. Figure out how much you can realistically repay, contact creditors and if necessary negotiate reduced monthly payments.

• Close excess credit cards gradually starting with the latest ones so that you don’t lose your credit history. Ensure that each account is reported as ‘closed by consumer’ in your credit history

• Open up a savings account, perhaps with a small savings plan, to show that you are building a cushion to cope with any negative changes.

• Check out your credit history at least once a year, and correct any errors on your credit report.

• Establish stability. Live at the same place for one year + and keep the same job for at least one year. Take out a small loan and pay it back as agreed (making sure that the on-time payments are reported to the credit agency). Use direct debits (which may well give a small discount)

• Get a handle on how you spend your money. Track every expense for a month and figure out how to improve your credit habits. Writing down where the money goes is a laborious chore, but a real eye-opener for many families. The money spent on the little things could add up and pay for the big thing you really want.

• Get financially fit, but also prepare to have fun. Build it into your budget. It may mean forgoing some immediate spending habits for a long term goal. Perhaps you want to travel? Challenge yourself to prepare for it: study a foreign language, dine at ethnic restaurants, buy maps, get in shape. Budgeting is not about being frugal. It’s about saying
What’s most important to me and how do I get there


Borrowing to improve credit score.

Obtain credit cards.
One of the best ways to rebuild credit is to obtain credit! Keep the balance below 45% of the available credit limit. Use just 2/3 cards wisely, and check that this wise use is reported back to the credit bureaux. This is one of the most effective ways of improving credit score.

*Check the listings under ‘ online bad credit card applications’ category for guaranteed prepaid credit cards and low credit limit unsecured credit cards
(Most secured credit cards give guaranteed approval once they receive your prepayment deposit)

Use an Equity loan.
Pay off high interest credit card debt with lower interest home equity loan. It makes very good sense to improve the value of your house with a house improvement loan financed with an equity loan.

Apply for a payday loan
for an instant injection of cash to keep accounts current. ( O.K. for poor credit ratings as long as you have a reasonable salary.)

Apply for a mortgage..
even with low credit score, funds can be obtained from the ‘subprime sector’ (rather than secondary markets which deals with standard mortgages.) Sub-prime lenders specialize in handling risky borrowers and charge higher interest changes and upfront fees. The larger the down payment, the lower the credit score can be

Consider a consolidation loan
that consolidates debts into one lower monthly payment apportioned amongst your creditors and paid on your behalf to the creditors. Requests will be made to have the interest frozen to enable more speedy repayment of debts.

*need help? consult listing for debt management coaches