The Top 3 Ways For Moms To Improve Their Credit Score Quickly
Are you looking for ways for moms to improve their credit scores? If so look no further, today we will discuss the foolproof methods for increasing your credit score.
When I had my first child, she had to stay in the NICU for a couple of days after birth. This left me with a huge medical bill that I could not pay. Eventually, that bill, along with others, was placed on my credit. As a new mom, I did not have the money to pay off our medical debt.
Causing my credit score to drop significantly. I was out of work and had no idea how I would pay off the thousands of dollars in medical bill debt that was sucking the life out of my credit score. Needless to say, I felt hopeless and anxious, to say the least.
I decided to take matters into my own hands. And began researching methods to repair my credit score. I purchased credit repair books, joined credit repair Facebook groups, and read articles from expert sites. As of today, my credit score has improved tremendously due to DIY credit repair. And I no longer have medical bill debt or collection accounts on my credit report.
Keep reading, and I will share with you simple ways to improve your credit score as a mom.
Moms Improve Your Credit Score Without Paying Off Debt
Let’s be real, if you had an abundance of money sitting around, more than likely, you wouldn’t have collection accounts listed on your credit report. Not having the funds to pay off debt can make improving your credit seem like an unobtainable goal.
However, there are various ways to improve your credit score without immediately paying off your debt. But before we get into the methods to improve your credit score, let’s first identify some key terms that will help you repair your credit.
According to Equifax, a credit score is a three-digit number designed to represent the likelihood of paying their bills on time. However, there are many different credit scores and scoring models that we will get into later. Typically the higher your credit score, the more favorable your credit terms will be. (Low-interest rates, lower monthly payments)
Collection accounts are debts that are owed. These accounts can stay on your credit report for up to 7 years from the date the debt first became delinquent. Collection accounts can drop a credit score by more than 100 points, according to credit.com.
The Consumer Financial Protection Bureau defines credit reports as statements that contain information about your credit activity and situation. This includes information such as your payment history and the status of your account. Your credit report includes your personal information, such as;
- Birth Date
- Social Security Number
- Phone Number
- Current and Former Addresses
Credit reports typically include information on credit accounts such as;
- Current and Historical Credit Accounts
- Account Type
- Credit Limits
- Account Balance
- Payment History
- The Date the Account was Opened and Closed
- The Name of the Creditor
Dreaded collection accounts are also included in credit reports. Here are the types of collection items that can be listed on a credit report.
- Public Records
- Civil Suits and Judgements
Inquiries are also listed on a credit report. An inquiry is a company that have accessed your credit report. There are two types of inquires, hard and soft.
Credit Bureaus are also called credit reporting agencies. Most people know about the 3 major credit reporting agencies; Equifax, Transunion, and Experian. These are the companies in which lenders report, whether or not you are paying your bills, the amount of debt you owe, and relevant public reports such as bankruptcies or tax liens.
Accessing your Credit Report
The first step to repairing your credit independently is to first obtain a copy of your credit report. It’s impossible to know what to fix, if you first don’t know what’s wrong.
Federal law allows consumers to obtain a free copy of their credit report each year. This report can be obtained on Annual Credit Report.com. However, you will need to have access to your 3 bureau credit reports monthly for credit repair and disputing.
I use Smart Credit to access my 3 bureau credit reports when doing credit disputes. Because it allows me to have a side-by-side view of the accounts listed with each bureau and because it’s relatively inexpensive. To start your initial dispute, you can start off with a free trial.
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WAYS FOR MOMS TO IMPROVE THEIR CREDIT SCORES
1. REVIEW YOUR CREDIT REPORT
Once you have obtained your credit report, you will want to review the information listed to ensure everything is correct. According to CFPB (Consumer Financial Protection Bureau), one in five people have errors on their credit report.
These errors can actually lower your credit score, making it more difficult to purchase that new home or car.
For those who discover an inaccurate birth date, previous address, employer, or phone number. I don’t care how small the error is. DISPUTE IT!
For any inaccuracies listed in the personal section of your credit report, you will send this dispute letter to the credit bureau that is reporting the incorrect information.
Reporting Status of An Account
Let’s say you had a Target Credit Card back in 2007 that was closed and placed in collections. Remember, collection accounts are old debt. However, the balance listed on the account is incorrect, and/or it is still reporting as opened. You can dispute this account. Here are a few more inaccuracies you can dispute in regards to the reporting status of an account.
- Closed Accounts Reporting as Open
- You’re Reported as the owner of an account; however, you were only an authorized user.
- Accounts that are inaccurately being reported as late or delinquent
- Date of last payment, date opened, or date of first delinquency being reported incorrectly
- The same debt is listed more than once
The reporting status of an account can also harm your credit score. Therefore having these inaccuracies removed is one-way moms can improve their credit score without paying off old debt.
What if the credit bureau has that old Target card listed with the incorrect balance and/or credit limit? Yep, this can potentially be harming your credit score as well. Errors such as the ones I have listed are the most common inaccuracies listed on consumers’ credit reports.
This is why it is so important to obtain a copy of your credit report. Like I said before, you can’t create a solution unless you can identify the problem—Smart Credit 7 Day Trial.
2. Obtaining a Secured Credit Card is One of the Ways Moms Can Improve Their Credit Score
To improve your payment history and improve your credit profile, you will need to obtain a credit card or some type of revolving credit. I recommend getting a secured credit card.
A secured credit card is backed by a cash deposit you make when you open the account. Therefore, your credit limit will be the amount of your deposit. Approval odds are higher for secured cards, which is why they are an excellent tool for building or rebuilding your credit.
When I was building my credit, I applied for a secured credit card with Capital One. After a year or so, they eventually preapproved me for additional credit cards with the company.
You can obtain secured credit cards with companies such as;
- Capital One
- Navy Federal Credit Union
- Open Sky
3. Moms Can Improve Their Credit Scores By Using Credit Builder Loans
Although you might have damaged credit, there are still companies who are willing to help you. Companies such as Credit Strong and Self are two of the most popular credit-builder loans.
With credit-builder loans, you are allowed to choose the amount you want to borrow. However, you will not receive the money upfront. Instead, you will pay a monthly payment. This amount is held in a certificate of deposit insured by the Federal Deposit Insurance Corp. Once you have made all of the payments, the money is released to you.
I love these programs because both programs helped to increase my credit score by over 50 points. From reading some of the reviews on Facebook, I am not the only one who has experienced a credit score increase from using Credit Strong and Self.
Final Thoughts on Ways to Improve Your Credit Scores For Moms
Repairing your credit isn’t necessarily an easy task, and it’s not something that can be done overnight. However, with patience, and consistency you can improve your credit score if you follow the recommended actions above. For more assistance and credit repair tips, be sure to join our new Facebook Group DIY Credit Repair for Moms.