1. Go pro: Credit apps aren’t as reliable as we’d hope, so take the time to find a professional and have them run a credit report. It’ll ding your score by a few points, but the accuracy and peace of mind that brings will be worth it (and you’ll recover quickly).
2. Get planning: Have payment plans for all “cash advanced” loans, and pay as much as you can WEEKLY.
3. Pay to play: If you don’t qualify for a card but need to build credit, apply for TWO secured (aka pre-paid) credit cards. Select the lowest max allowed and use them weekly (and PAY them weekly, too). You’ll build good spending and payment habits while you build a better credit score, and that’s wins all around.
4. Don’t run: If you have any bills that have been sent to a collections agency, don’t ignore them. They won’t disappear and if you keep running your credit keeps getting hit. Oftentimes you can negotiate a lower settlement to pay it all off, but if not, set up a payment plan and keep on it. This way, your collections won’t be counted as “collection,” but rather “debt” or “bill” to creditors.
5. Lay low: Credit cards are revolving accounts (meaning you can carry a balance from one month to the next). Try to keep your balance under 30% of the limit for the best selection on credit reports.
6. Cut it out: Give attention to your “debt to income ratio,” and cut out needless spending. More income + less debt = better odds for homeownership.
7. Aim high: Get familiar with the tiers of credit and loan approvals. If you can make it to the bottom tier for approval, keep working and aim higher to the next tier, and so on. It can take a few additional months, but the reward of a better credit score, loan amount, and interest rate will be very much worth it (and you’ve already proven you can do it!).
8. Keep calm: It’ll be tough, but give yourself two months before checking credit improvements. Be optimistic, not unrealistic.
9. Strategize: Why do you need a loan? Know your end goal for needing qualification (be it a home, car, or startup business) and set up a game plan to achieve that goal once you identify and address the red flags on your credit.
10. Toot your own horn: Celebrate all your small victories and new growth habits. This is tough stuff, but you’ve got it in the bag (and if you ever need help planning—or celebrating, for that matter—give us a ring. They’re both kind of our gig).
