Few high schools or colleges teach personal finance basics, and sometimes our parents forget to explain how to be smart with credit (or we just did not listen).
If you are a woman who has accumulated bad credit, whether through poor decisions or just bad luck, you can use these tips to bring your credit back into good standing.
1. Pay your bills on time.
In order to overcome bad credit, it is imperative you pay all of your bills on time, from your cell phone to your credit card to little library fines.
Paying bills late, especially for your credit card, will only worsen your credit. Developing a habit of paying bills on time will help put your credit back on track.
Do you chronically forget to pay your bills? Consider signing up for auto-pay so your bills will always be paid on time. You also can set up reminders on your smartphone or in your calendar.
2. Work with your creditors.
If you find yourself unable to pay back your debt on time, do not sit tight and hope the problem will go away. It won’t.
Call your creditors and let them know your predicament and ask if you can create a repayment plan. Many creditors will be willing to work with you and lower your monthly payment. After all, they want their money back and may be flexible if that’s what it takes.
If your creditors are not cooperative, contact a reputable credit counseling service. They will work with your creditors on your behalf to establish a realistic payment plan and help you overcome bad credit.
3. Establish credit in your own name.
Some married women make the mistake of no longer having a credit card in their name once they tie the knot. If you only have a joint account, consider applying for a credit card in your own name.
Use it for occasional purchases to keep the account active, and try to pay off your balance every month so you don’t incur interest charges. In the least, pay your bill on time.
“Responsible use of credit cards
helps build strong credit history.”
4. Create a budget and stick to it.
If being irresponsible with your credit cards is what caused you to have bad credit, it is time to correct your behavior or you will only continue to have credit problems.
Create a monthly budget by listing out all of your required expenses, and then allow yourself a small fund for miscellaneous purchases. Put the remainder of your money toward paying off debt.
Living on a budget and paying off your debt are key steps toward improving your credit.
5. Check your credit report.
You should always check your credit report at least once a year to ensure there are no errors on it that could be contributing to your bad credit. While not a very common occurrence, mistakes on reports do happen that can impact your credit.
You can get your report free once a year at www.annualcreditreport.com. This will also help you keep tabs on your progress of improving your credit.
Photo source: femalebreadwinners.com.