Single Mom with Bad Credit?
Boost your Credit Score to Avoid High Rates
Single moms all over North America have to work hard to make their ends meet. They have to make payments for insurance, mortgage, medical, grocery, utility bills, etc. all on one income.
Many times, single moms have a hard time making payments and become bad creditors. They want to make the payments, it’s just things happen. Their car crashes, their child falls sick, they miss too many days at the office and they might have to take a pay cut. There can be many reasons that cause a single mom to become a bad creditor.
With their bad credit, it’s hard to get a loan. It might be an auto loan, a payday loan or any other money lenders will charge them high rates if they have bad credit.
So to avoid high rates due to low credit score, I am going to share few tips that will help you to boost your credit score and lower your interest rate.
Try to Pay Cash
I know this sounds drastic but this is one of the key points to boost your credit score long term. We usually do shopping on our credit card whether it is to buy a pin or a plane. Try to pay cash unless absolutely necessary. It will reduce the amount of overspending and, also ensure you don’t increase your debt.
Don’t Hit your Maximum Limit
Most people use their credit cards until it reaches its maximum limit. This is what portrays you as a bad creditor. Try to keep your credit below 30 percent of the maximum limit. If you need to shop more, take out your second card, and don’t let it max out.
If you need to use your card, be an active customer
Using your card frequently and making payments on time makes you an active customer. There is an advantage to being an active customer, which is your bank will report you as good creditor and reliable person to credit bureaus. However, the key is making payments on time.
Don’t cancel your unused cards
Most people, who have bad credit, tend to cancel their credit cards. Cancelling rarely used cards could drop your credit score; however, they can’t improve it.
So, if you have a credit card that you use very rarely, it can help you to improve your credit score. Do shop it once a month and, shop only for things you can make payments for. Make its payment on time. In this way, the bank will report you as a good creditor to bureaus and your credit score can be expected to improve.
Pay your existing debt
If you have a previous debt, try to pay it off before going to shop for loan. Once all clear you can go to shop for a loan.
This article is written by Allison K Watkins a mortgage professional. He writes informative articles that help people get mortgage loans -especially people with bad credit. You can read more of his articles on the blog, BadCreditWhiz.com. You can also contact him by email or by following him on twitter @allisonkwatkins.