If you’re more dedicated than the rest of us, you might be sticking to your January resolution to work on your credit. Unfortunately, like most things in life, it takes money to do so. Paying down debt or getting a credit card takes money in one way or another, so they may not be viable options right away. How, then, can you work on your credit when money is short? Here are four ways to work on your credit when money is thin.
1. Pay On Time (or early)
If you’re unable to pay substantially more than the minimum payment, the next best thing is to make your minimum payment on time or early. Paying more than the minimum is always ideal, as it pays down the balance faster and can save you on interest while reflecting well on you with the lender and possibly with the credit bureaus, but it may not always be an option.
Everyone’s human, so be sure to make use of your bank or lender’s auto-pay features to ensure your payments go out on time. If you end up with a surplus of cash one month, you can typically do a one-time adjustment to the payment to pay a bit more, and go back to the regular payment the next month if you’d like. At the very least, making the minimum payment on time can build good payment history and give you a good history to work with.
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2. Check Your Credit Score
You can’t know where you’re going until you know where you stand. No, I didn’t get that from Pinterest, but I’m sure it’s on there. If you’re looking to work on your credit, one of the best indicators of your current status is your credit score. Whether you’re focusing on your personal credit or business credit, you can see your score for free with Nav. Free means you don’t have to spend money, and that means you win.
You’ll also get a free look at your credit report, which can give you more insight into specific areas you can focus on as you work on your credit.
3. Dispute False Information
Credit bureaus make mistakes. With millions of individuals to monitor and countless transactions and tradelines, it’s bound to happen. The good news is that they recognize their imperfections and have procedures in place to work with you to remedy any false information on your report.
Derogatory information such as bankruptcies, repossessions, deeds in lieu, tax liens, or collections can have a big impact on your credit score, and certainly not a positive one.
If you find any false information on your report, such as a credit card you never opened or a collection that has long since been paid off, you are within your rights to contact the bureau and dispute the information. Be prepared with any documentation to verify your claims to make the process as smooth as possible.
4. Build Solid Credit Age
While it’s tempting to look for a quick fix, sometimes the answer is just to grind it out over time. If your credit history is only a few years old or is just barely starting, putting some road behind you (figuratively, of course) can be a great step to building credit history.
You don’t just want any credit history, of course, so be sure to follow simple practices along the way. Keep your balances low, make your payments on time, and monitor your credit. You’ll also want to avoid opening too many accounts, as doing so can ding your credit each time you apply.
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