Repairing your credit means getting rid of the negative credit report information and catching up on your overdue bills. This could raise your credit score but might not be enough to make you credit worthy again. However, to raise your credit score high enough to entitle you to a loan, you have to rebuild your credit. Doing so would only prove that you have the capability to handle credit responsibility.
It might be tough to get started, but once you achieve that momentum you need, you will be sashaying toward a good credit score. You can always begin by developing better credit habits.
Using a credit card is one way you can work toward building your credit.
Tips for Using Your Credit Card Wisely
You’ve got to start with healthy spending habits if you’re going to get your financial situation in order.
- Don’t use your credit card to make your everyday purchases, such as food, gas and clothing. Use your debit card or pay cash.
- When you can afford to, pay more than the minimum required payment. If you make minimum payments each month, you’ll end up paying significantly more over time in interest.
- Don’t buy things you can’t afford. Living off “borrowed money” will keep you in debt forever.
- Buy things you need rather than things you want. Save up and pay cash for things you want.
- If you can’t make a payment in time, let the creditor know immediately–ideally before the due date. Most creditors offer assistance or will allow you to delay a payment if you just communicate with them.
- Don’t exceed your credit limit. Ideally, you should keep your debt level at 30 percent or less of your credit limit. Your credit score is impacted by the quantity of debt you have, but you also must have SOME debt. Keeping your balances low is the smart way to go here.
If you’ve gone through financial abuse in a toxic relationship with a narcissist, chances are you might need to think about repairing your credit. While there are plenty of ways you can DIY your credit repair, you might find it overwhelming and want to look into a credit repair company.
Plus, if it’s been a while since you’ve looked at your credit report, or if the narcissist was hiding things from you (all too common in these relationships) you may be surprised to find errors, mistakes, or even a black mark or two.
How do you avoid an unethical credit repair company?
Fortunately, a Credit Repair Company can help you fix those mistakes and erase those black marks. Watch out for scammers, though, and choose a reputable Credit Repair Company with these tips.
Don’t pay anything upfront
Avoid a Credit Repair Company that wants you to hand over a fee or payment before they meet with you. That’s always a red flag. Reputable companies will first talk to you, assess your credit report and discuss your current situation before asking for any type of payment for their services.
An up-front fee is a red flag that the company will probably take your money and run. And no matter what type of charges you may incur, be sure they aren’t exorbitant. If a Credit Repair Company claims your case will cost thousands of dollars, look for another one.
Watch out for “re-inventors”
Some companies will tell you that you can wipe your credit slate clean by “re-inventing” yourself with a new social security number. But that’s not true!
In most cases, what they plan to do is get you a new credit report by applying for an Employee Identification Number (EIN)–used by businesses–which resembles a social security number, and you’re told to use it as such. But this practice, known as “file segregation,” is a scam, and it’s also illegal!
Avoid any Credit Repair Company that suggests this practice.
Look for a credit repair agency that helps you help yourself
A good Credit Repair Company will tell you (for free!) what you can do yourself, such as writing letters to creditors and contacting the credit reporting bureaus about errors.
Avoid any Credit Repair Company that encourages you to do anything illegal or unethical–such as disputing a legitimate charge or fee on your credit report.
Before signing up with any Credit Repair Company, make sure you check with the Better Business Bureau. They’ll have records of any formal complaints against the company, so you can avoid scammers and rip-off artists.
More Resources for Financial Abuse Victims