Cash flow is an issue for many people and families in the United State. Bad credit is a major concern too. Compounding the issue is the fact that so many people don’t understand how credit actually works. According to recent research, about one out of eight Americans stated that they didn’t know what their credit score was. Another study found that 71% of people did not fully understand what the true ramifications of bad credit can be.
But that also means that a lot of people don’t understand how to repair their credit either. They don’t realize how taking some simple steps could help them turn their situation around and allow them to increase their financing options. Here’s how you can build a strong money network with little or bad credit.
Get a Loan Through Money Network
There is a variety of lenders that will consider you even if you’re in a bad credit situation. In most cases, they will look at your current income to judge whether you’re eligible for a loan. One example is the Money Network. Services like these allow you to access payday loans even with bad credit, as long as you have a steady and verifiable source of income. If you need more information about what they do what they have to offer, you can learn more about Money Network.
Note that they don’t only offer payday loans. You could also get installment loans backed by your revenue as well. So, you won’t have to be pressured to hand out a portion of your paycheck and be able to stretch your payments over a longer period.
Improve Your Credit Through Debt
It may sound strange, but debt can be a great way to re-establish your credit history. The question is, how can you get more debt if you don’t have the credit to access it? Well, one of the simplest ways that you can do so is by applying for a secured credit card.
This is a card that will require you to leave a deposit upfront, which will serve both as collateral and a credit limit. The activity on the card will be reported to credit bureaus. This means that you can use the card to make some everyday purchases and pay the card in full each month.
These cards don’t typically have credit requirements. All they need is your deposit and a starting fee. But, the beauty of these cards is that as you build your credit, the issuer may offer to extend your limit. So, you’ll now get a fully-fledged credit card and be able to use it to build your credit even further.
Double Check Your Credit Score
But, how can you know if you actually have bad credit if you never check your credit report? You might be surprised by what is and isn’t in there. For instance, many people aren’t aware that there is a statute of limitations on debt.
Any bad information on your credit report will usually be removed after seven years. That includes missed or late payments, collection accounts, and personal bankruptcy. Therefore, a lot of things that you could have thought were hurting your credit don’t have any effect anymore.
There could also be some false information that is hurting your credit. There could be an account that was closed but hasn’t been reported, for example. This is why it’s important that you keep an eye on your credit reports, and always make the corrections immediately.
Each major credit reporting agency (Experian, Equifax, and TransUnion) will allow you to get one free copy of your report per year, and they all have simple procedures for correction, so make sure that you ask for your copy as soon as possible and act if you see anything wrong.
Become an Authorized User
This is a lesser-known and somewhat underused way to build credit. But, did you know that if you become an authorized user on someone else’s account, their information will be reported on your credit report and, as a result, have an effect on your credit?
Yes, by being on someone’s card as an authorized user, you could start building or improving your credit, even if you do not perform any transactions yourself.
However, this could be a double-edged sword, as negative information could also end up hurting you. So, if you’re going to do this with somebody, make sure that it’s someone who has a strong grip on their finances and is responsible. Another thing you could do is become an authorized user on one of their lesser cards with a lower limit that they or you will always make sure is in order.
Also, beware of buying authorized account status. There are plenty of services that will allow you to become an authorized user on a complete stranger’s account. While legal, these could still put you in trouble with certain lenders. The new FICO model was revised to reduce the impact of tradelines on the credit score, so the small boost you achieve might not be worth it.
Increasing your financing options can be done in a number of ways. You can either work to make yourself more attractive to lenders or look at alternatives. Whatever you do, don’t make the mistake of paying someone for something you can do yourself, and always make sure that you have a clear visual of your financial situation before you start looking at solutions.