Author: Holly Johnson / Source: Wise Bread
Building credit takes time and vigilance, and that’s especially true if you need to repair credit problems from the past. If you have a history of late payments, debts in collections, or a bankruptcy, for example, you can’t expect your credit score to fix itself.
Once the dust has settled and you’re ready to get on the right track, you need to take the appropriate steps to rebuild trust and boost your FICO score month by month. Some of the best steps to take whether you’re building credit from scratch or trying to fix poor credit include getting a secured credit card, making sure you pay all your bills on time, paying down your debts, and keeping your credit utilization ratio low.
Fortunately, there are some apps and online tools that can make improving your credit score easier. Some of these tools are free and easy to use, while others require a bigger commitment. If you know your credit score needs help but you need help to move it along, consider these apps and strategies.
1. Self Lender
If you need to build credit from scratch but can’t yet qualify for a credit card or loan on your own, you may want to consider a “credit builder loan.” To understand how these work, you need to forget about the usual notions of why you borrow money. In this case, you’re only taking out a loan in order to build credit.
With a credit builder loan from Self Lender, the amount you borrow is held in an interest-bearing CD and you don’t see it until the end of the loan term, which is 12—24 months. You make regular monthly payments, which are reported to the three credit reporting agencies — Experian, Equifax, and TransUnion. Once the term is complete, you’ll get the funds back you paid in. In that sense, a credit builder loan is like a forced savings account.
There are costs associated with these loans, but they’re minimal. On a 12-month loan for $1,000, for example, you would just be charged a $12 administrative fee.
2. Credit Karma
If you want to improve your credit score, you need to find out what it is — and be able to track it regularly. One of the best ways to do this is by signing up for a program that offers a free estimate of your credit score every month.
Credit Karma is a service that does just that. Once you sign up for a free account, you can check your credit score whenever you want, see all your debts in one place, and monitor hard inquiries on your credit reports. You can also get information on reasons your credit score has gone up…
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