You work hard. You do your best to provide for your family. You do what you can, but sometimes it is hard to keep up. You have bills to pay and mouths to feed. There are necessities that you can’t go without. You are doing your best to stay afloat. You want to save money and rebuild your financial situation for a better future. You know your credit score is important.
You know it factors into your ability to get a mortgage and other loans. A low credit score can hold you back. A credit score can be hard to understand. You may wonder where your credit score comes from. What factors into your score? What negatively influences your score?
These items influence your score:
- Open credit usage
- Payment history
- Derogatory marks
- Age of credit
- Number of accounts
- Credit inquires
These items can hurt your score:
- Negative payment history: late or missed payments
- Accounts in collections
- Defaulting on a loan
- Filing for bankruptcy
- Foreclosing on a home
- High credit balances and maxed out credit cards
- Closing old credit cards and cards with available credit
- Applying for credit cards and loans in excess
You can take steps to help repair your credit score. You will want to start by getting a copy of your credit report and looking it over for any errors. If you do see errors, report them right away. Look for any accounts that are past due, have been sent to collections or are in a charged-off status. You will want to budget and tackle these items first. Next, look for accounts that are maxed out and make efforts to reduce these. Know that this process will take time. It may be stressful, but it is possible-even after filing for bankruptcy. You will need to budget, be vigilant and remain detail oriented.
Disclaimer: The information in this blog post (“Understanding your credit score“) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Sheehan, Barnett, Dean, Pennington, Dexter & Tucker, P.S.C. or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient‘s state, country or other appropriate licensing jurisdiction.