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Working Through Credit Challenges

Even though most people have some general idea of what their credit score is, it usually isn’t until they apply for a line of credit that they get the reality check.  What the lender assumes when they see a low credit score is that this person lacks the discipline to pay bills on time, or may be making other poor financial choices.   As the saying goes, life happens.  Perhaps you have fallen into some unforeseen circumstances such as a job loss, health issues or some other situation that rendered you to have to use more of your lines of credit, or lessened your ability to make your payments as agreed upon.   The credit score doesn’t tell them your story, only the end results of your story.  At Gold Credit Repair, we understand there are many scenarios that can lead to a low credit score.  Depending on your situation, these tips may help give your credit score a lift.

  1. Distribute revolving credit card debt.  Remember, credit scores get more points if your debt to available credit ratio is less than 30%, and ideally MUCH less than that.  If you have multiple credit cards where one or more are above that 30% mark, consider moving the debt from one card to another, or more than one.   This can possibly raise your credit score as much as 20 points!
  2. Transfer outstanding balances to new accounts.  If you only have one or two credit cards and are able to open another line of credit, such as a pre-approved visa card,, transfer some of that old balance onto the new card.  This will help establish some history and help with the debt to credit availability ratio.  Keep in mind, most lending institutions prefer you keep your accounts to no more than five credit cards.
  3. Keep using your credit cards!  Once you pay off those balances, do not close the accounts!  Make small purchases that you would normally make anyway, such as gas or groceries and pay it off at the end of the month.  This will build your good credit history and show lenders you have willpower to keep your spending within your means and in return you will be awarded more points on your credit score.

The more payments you make on time, combined with keeping the balances low on your revolving credit accounts, the sooner your credit score will improve.  Our focus is on helping you build a strong financial future.