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I am a single mom, not a lawyer, banker or credit repair expert. So just keep that in mind.
Like most single moms, I am always looking for the best suggestions on how to raise my struggling credit. Divorce leaves your credit in shambles. It throws your debt-to-income ratio off balance, and leaves your FICO score in the lurch.
Let’s start with some fast and unusual ways to reclaim your credit.
Piggyback someones else’s credit as an authorized user on their card.
Apparently, this works really well and is one of the great secrets of credit repair. You ask a family member or friend with whom you have a lot of trust if they will add you as an authorized user on one of their older credit cards. Most credit cards allow up to two authorized users and they don’t even need to give you the card or a number in order for you to get credit whenever they pay on it and keep current on it.
Think that sound sneaky? There’s a company called BNB Financials that apparently allows people with bad credit find other people who have good credit and pay them every month to add you as a user onto one of their credit cards without sending you a card – you literally just hacked your way onto someone else’s good credit!
RentPlus might be a miracle
Full-disclosure: I haven’t tried it, myself but I plan to start, this month.
Are you paying rent like I am? I have several friends who have taken advantage of an opportunity to repair their credit using RentPlus. I am often late in paying my credit cards or even my phone bill. But I am NEVER late paying my rent. Why shouldn’t I get credit for making rent payments?
RentPlus will report your rent payments to the credit bureaus whenever you pay rent (and sometime utilities) on time. But the real hitch is that it does not report when you’re late. You can bet I am going to give this a try.
Get a secured credit card.
You know – cards where you are your own creditor. Just google “secured credit cards”. There are tons of them.
Give yourself a year to pay down high interest, low balance
It takes a little time – but when a year seems like a big sacrifice, just consider that it takes seven-ten years to really work off a credit crisis and even then, divorce can continue to haunt you for years. So, a year is not so bad. Take time to work on paying your open debt, meaning that if it is written off or charged off, it comes as secondary in importance to something that is open and active.
If you haven’t heard it already: the best advice I ever heard on credit cards is to pay down the highest interest rate and lowest balance, first. Even if you pay only the monthly minimums on everything else, pay down your high-interest cards as soon as possible, starting with the one that has the lowest balance. Concentrate your debt repayment where it saves you the most money.
Reach out to a community
Apparently, there is a “Credit warriors” facebook group that I understand is really helpful. But you can also reach out to local community organizations. A girlfriend of mine took a free class on budgeting and it was amazing because she had to bring in her actual bills and sit down with a financial advisor (for FREE!) She was surprised when they saved her huge on her car loan by dividing her monthly payment into weekly installments.
Check out the “myfico” forums for lots of great advice. Nerdwallet.com is another great one.
Little things like that are invaluable and there are tons of laypersons who know these things and have lived these things. There can be nothing better than experience for fighting the good credit fight.
There’s an app for that.
Now this one I do. Credit Karma is a free way to monitor your credit anywhere and at any time. It gives you grades based on each category and then give you tips on how to improve your credit.
Us it to check all your reports first and make sure that they are accurate. In the event that you find an inaccuracy of any kind, dispute it, right away.
To raise your credit, you usually want at least 3 revolving debts that are paid on time. Credit cards should always be below 10 percent utilization and paid in full each month.
Give yourself some credit, Momma!