The simplest way to fix your credit is to simply pay off all of your debt. Stop buying sodas, and coffee. Quit going to the drink machine, and skip the coffeehouse. Carry a bottle of tap water from home, refill it at water fountains. The amount of money you don’t spend on drinks every day, you apply to that record club bill from your freshman year. Also, when you don’t stop for coffee, you also don’t buy that muffin. the shear amount of money you will save by doing this will allow you to pay off a multitude of smaller bills and debts that are gumming up your credit report.
2.Pay the bills now.
You’ve done it yourself. You let the water bill slide a month because it is up to date. But by doing so, you can now pay the cable bill, watch the game with your friends, and pick up the good chips, instead of the store brand. You can worry about that pesky water bill next month. But next month, you don’t have the extra money. So it is the same choice, only this time, you skip the cable, and pay half the power, so you can pay the water. In six months, you are still not making more money but now you only have one bill that is totally caught up, and have added two personal loans to the monthly mix. Your credit cards are maxed out, but you use the Visa to pay off the Amex, and the Amex to pay off the Mastercard, and your bank card has a credit line that you used to buy gas last month, but didn’t pay, and when you use it to try to pay the Visa bill, it all falls down, you have over balance charges and NSF fees everywhere. Time to go get a loan against your car… again..
Had you simply paid the bills on time, not let them slide, you would still be making the same money, but you would eb able to manage the income against the outflow of funds. Yeah, you have to give up extra things. Sometimes, you just do not need cable TV all that much.
3.Quit getting things with contracts.
New cell phones, discounted cable TV packages, Internet service bargains. If you have the option, don’t get a free cell phone with a contract extension. Pay for the phone, and stay commitment free. Contracted bills are debt bombs waiting to go off. You have a problem, and cannot pay the bill? Too bad. The mobile company does not care. You are contracted, and now that 400$ phone you got for free has cost you 1300$ in early termination of contract fees. Did you have that extra 1300$ sitting in the bank?
Now, I know that it may seem like this would avoid credit all together. And for the most part, it will. But the key here is that it is better to have a little good credit, than a lot of iffy credit. Credit is not only built by using it, but is also controled by knowing when not to use it. Your credit report shows more than just what you think it does. If you have the option to either buy something on credit, or purchase it outright.. you’re better off using the debit card, than the credit card. Another myth is that having a little bad credit is better than having no credit. Well, this simply isn’t true. No credit means you haven’t done anything. Bad credit means you’ve done it wrong.
And, in closing here.. Think about the use you have intended for your credit. Would your father give you “that look”? Why do you think he has “that look”?