How Did I Rebuild My Terrible Credit in Just One Year?
1. Decided to do it!
I believe this is the most crucial part of my story. If I wouldn’t have made up my mind that I was going to get myself out of this rut and have good credit then it wouldn’t have ever happened. I felt like I didn’t have a choice, though. I had been around people with decent credit lately and seeing all the things they could do was amazing. They could lease a new car, or they could buy furniture and have 4-5 years of no interest. Also When I had a major issue with my car and had to sell it instead of fixing it was at that time I knew I wanted credit!
In this story, I lay out the exact way I went about getting myself out of this terrible rut and became a good credit person. As a disclaimer, I don’t know if you could get out of bad credit at the same time period that I did although it ios likely. But If it takes you a bit longer don’t give up because it is totally worth it in the end!
2. I Got an Auto Loan
I needed a car and I keep seeing the benefits of an auto loan from all of my customers so I decided to get an auto loan. No, I didn’t go to a buy her pay here. After 2 weeks of searching, I found a place that could actually help me out with a loan. (I didn’t know of Auto Credit Express at that time) So I got my auto loan and with that got my credit rolling. I knew though with all my miscellaneous charges on my credit that it wasn’t going to be a silver bullet I had to keep working on it and help myself! So that leads us into the next and second most important part of my story.
3. Got My Credit Report and Got to Work!
So I went Credit Karma and got my credit report. I was able to see who thought I owed them money and how much. So I added up all of the charges and made a plan to pay them off. I started with the smallest charges first and got them off as fast as I could. When it came to the larger debts I had to make some sacrifices. I gave up a few things that were costing me money. I quit eating out, downgraded my phone’s plan (very hard for me), and I worked allot harder and more hours. I called the companies holding my debt and negotiated a payment plan with some and a low payoff amount for others. And after a bit, I had them all paid off. I have to say it felt amazing! Now I did this while doing step 4 so don’t think you have to just do 1 at a time. If you want to get good credit fast then you need to work hard at it!
4. Figured out what a credit union is…
Wow, what a great help this was! Credit unions are just awesome! My credit union has helped me so much I cannot thank them enough. Ok so first of all credit unions are just like banks except… not! So they are nonprofit entities that save you money because they are there to help their member and not people who own their stocks. So my credit union took a look at my credit and offered me a $1000.00 secured loan. Ok, so how did they do this? Well, I had to save up 1k and leave it in my savings account for them to use. they then gave me a secured loan off of the money. So every month I paid 100 dollars off on the loan and that 100 dollars became available for me to use right away every month. This alone may have sent me over the top! My loan officer at my credit union then suggested while I do this that I get a secured credit card also. So that leads into the next segment.
5. Hello Secured Credit Card
So I did exactly what my loan officer suggested and got a secured credit card through citi. So let us recap a bit. I now have just about all of my debts paid off. I have an auto loan. I have a secured line of credit through my credit union, and I have a secured credit card. Wow, I had been through allot already and I’m only 3-4 months in, incredible! Very Very Important note here! Never Ever go above 30% of your total credit card balance! Credit Burroughs like to see that you are responsible and keeping your debts low is ver important. I think it also shows that you can discipline with your money. So Now that I have all this going on and I have had a secured card for 2 months I decided to check my credit. And BAM I’m over 600 right at 610. I couldn’t believe it I had never been there before and it felt great!
6. Unsecured credit and the benefits of working overtime
Now that I have all of these credit building tools my credit has jumped up about 75 points from where I was. Now I decided to do something I never thought possible, I applied for a nonsecured credit card. I went through capital one because they have a great reputation for people who are trying and working hard. One of the unforeseen benefits of working all the overtime was that I was making more money and that was great to the credit card company. So I got approved for a $2,000.00 unsecured balance. A real life credit card that was all mine! I felt like I had achieved a status in life that only seemed like a dream just 6 months back. Now here comes the real magic, the real tough stuff, the real test and credit builder.
7. Keep Your Balances Low And Make All Of Your Payments On Time!
After 1 year was up I had done it, and it wasn’t that hard. When I look back it seems funny to me now that I spent all that time living a life of hiding from creditors and not being able to use credit at all. It just so happened that Towards the end of this year-long journey was Christmas and for the first time as being a father, I could buy Christmas presents for my children without worrying if I will have enough money. I didn’t have to save up money because now that I had been making perfect payment for 6 months I have a much larger limit on my credit card and can now spend a bit without charging to much credit! And that is the most important part! Making all of your payments on time and not going over 30% of your credit limit will raise your credit very fast and it blew my mind! Now follow these steps or pave your own path but if you just decide to do it, get a plan, and stick to it, it can be achieved faster than you think.