![\"How](\"\/\/thehappyhousewife.com\/frugal-living\/files\/2016\/06\/how-to-improve-your-credit-score-FB-1024x725.jpg\")
<\/p>\nIf you\u2019ve been reading this blog for a while, you know I like to pay cash for most of my purchases (even big ones like cars). However, two years ago when we moved to Florida I had to qualify for a mortgage, on my own.<\/p>\n
(Long story \u2013 but we were buying a house before we sold our current house and my husband was between jobs, so I was on my own to qualify for our new home).<\/p>\n
I\u2019ve always paid our bills on time (thank-you automatic bill pay) but never paid much attention to my credit score because we always paid cash for everything.<\/p>\n
Then, all of a sudden I was consumed with credit scores, reports, bank statements, and every other piece of financial paperwork from the last three years of my life.<\/p>\n
I didn\u2019t realize that there were things you could do to raise (or hurt your credit score) until I needed the best score possible to get a great mortgage rate for our home loan.<\/p>\n
<\/p>\n
Pay your bills on time <\/strong><\/p>\n As long as you are living within your means, this should be very simple since every bank offers automatic bill pay. All of my bills are paid automatically each month so I don\u2019t even think about making payments and am never late even if I\u2019m sick, on vacation or super busy.<\/p>\n Keep your balances low <\/strong>\u00a0<\/strong><\/p>\n Ideally, you should pay your bills in full every month, but if you can\u2019t, make sure your balances remain low. If it looks like you have maxed out your credit cards, your credit score may decrease.\u00a0<\/strong><\/p>\n Use credit cards responsibly <\/strong><\/p>\n While you don\u2019t need to have a credit card to improve your credit score, having a credit card history that includes timely payments is a great way to work to increase your credit score.<\/p>\n Don\u2019t open multiple new accounts in a short period of time (that can decrease your score) but rather keep a few accounts in good standing and your score will improve.<\/p>\n Monitor your credit score <\/strong><\/p>\n I truly believe that knowledge is power and knowing your credit score will allow you to make the best decisions regarding your credit and purchases.<\/p>\n A recent survey found that 61% of people who checked their credit score improved their credit behavior. You can\u2019t fix something if you don\u2019t know it\u2019s broken, right?<\/p>\n But what if your credit score is awful! I know a lot of people who made financial mistakes when they were younger.<\/p>\n In fact, when I first got married I brought a closet full of shoes and a 1982 Toyota Celica into the relationship.<\/p>\n My husband brought over\u00a0$10,000 in consumer debt. Unfortunately, prior to meeting me, he lost almost everything in Hurricane Andrew. Since he was young\u00a0(and a bit careless), he didn’t have renters insurance so when Andrew destroyed South Florida, my husband lost everything except a few pieces of silverware and a frying pan.<\/p>\n He also lost his job and the condo he was living in.<\/strong><\/em><\/p>\n He was unable to pay his bills, made some other poor financial choices, and by the time I met him he had collection agencies calling on a regular basis trying to get the money he owed.<\/p>\n After we got married, we decided it was very important to take care of this debt and clean up his credit.\u00a0Since we knew that eventually we would like to buy a house (and get a mortgage), having good credit was important.<\/p>\n Pay off the debt<\/strong><\/p>\n We used a nonprofit credit counseling service to\u00a0assist us in setting up payment plans. Most of the cards were in default so we needed to get our minimum payments reduced without having penalties on the interest rate\u00a0to help get\u00a0things under control.<\/p>\n It took us two years to pay it off and was a huge financial burden, but we did it.<\/p>\n Check your credit report<\/strong><\/p>\n I didn’t even know what a credit report was until I got married. I quickly realized how important it was to monitor your credit report regularly.<\/p>\n My husband’s credit report contained all the\u00a0accounts\u00a0in default, but it also contained numerous errors\u00a0including\u00a0debt that wasn’t his.<\/p>\n Twenty three years later we still have\u00a0to check frequently to make sure he is not being penalized for someone else’s\u00a0bad choices!<\/p>\n Create a budget<\/strong><\/p>\n The reason my husband got into financial trouble was because he didn’t have a budget. When we worked with the nonprofit service they helped us set up a budget so that we only\u00a0purchased\u00a0what we could afford.<\/p>\n When we paid off all the debt, a budget helped us\u00a0stay on track and kept us from\u00a0ending up back where we started.<\/p>\n Start saving<\/strong><\/p>\n My husband got into financial trouble because he was young and made poor financial decisions. Many people I know today get into financial trouble because they aren’t prepared for an emergency, like car or home\u00a0repairs, medical bills, or an unexpected decrease in income.<\/p>\n If you work hard to repair your credit only to find yourself in the same place a few years later, all your hard work is wasted. Make sure you have an emergency fund available for when the unexpected happens.<\/p>\n Rebuild your credit<\/strong><\/p>\n Once we paid off our debt, we signed up for a\u00a0secured\u00a0credit card with a low limit. \u00a0A secured credit card is one where you put down collateral. Your credit limit\u00a0is based on your income and the amount of your collateral deposit.<\/p>\n Getting a secured card allowed us to charge items we could afford (and pay off every month) and helped rebuild our credit.<\/p>\n When I was first married, I was overwhelmed by the amount of debt my husband had. But after working hard to payback what he owed and then spending wisely, we were able to repair his credit. Now he has a credit score of over 800!<\/p>\n We did this during a period when he wasn’t making a lot of money and I was at home with two\u00a0toddlers. It is possible to rebuild your credit<\/strong> and move forward financially. It just takes planning, responsible spending, and hard work.<\/p>\n Over the years, I\u2019ve met many people who stick their head in the sand when it comes to their finances. Educating yourself to become a smart consumer is the best way to improve your financial future.<\/p>\n","protected":false},"excerpt":{"rendered":" If you\u2019ve been reading this blog for a while, you know I like to pay cash for most of my purchases (even big ones like cars). However, two years ago when we moved to Florida I had to qualify for a mortgage, on my own. (Long story \u2013 but we were buying a house before […]<\/p>\n","protected":false},"author":1,"featured_media":21958,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[3],"tags":[],"class_list":{"0":"post-21956","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-frugal-living","8":"entry"},"_links":{"self":[{"href":"https:\/\/thehappyhousewife.com\/frugal-living\/wp-json\/wp\/v2\/posts\/21956","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thehappyhousewife.com\/frugal-living\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thehappyhousewife.com\/frugal-living\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thehappyhousewife.com\/frugal-living\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thehappyhousewife.com\/frugal-living\/wp-json\/wp\/v2\/comments?post=21956"}],"version-history":[{"count":2,"href":"https:\/\/thehappyhousewife.com\/frugal-living\/wp-json\/wp\/v2\/posts\/21956\/revisions"}],"predecessor-version":[{"id":23013,"href":"https:\/\/thehappyhousewife.com\/frugal-living\/wp-json\/wp\/v2\/posts\/21956\/revisions\/23013"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thehappyhousewife.com\/frugal-living\/wp-json\/wp\/v2\/media\/21958"}],"wp:attachment":[{"href":"https:\/\/thehappyhousewife.com\/frugal-living\/wp-json\/wp\/v2\/media?parent=21956"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thehappyhousewife.com\/frugal-living\/wp-json\/wp\/v2\/categories?post=21956"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thehappyhousewife.com\/frugal-living\/wp-json\/wp\/v2\/tags?post=21956"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}You can improve your credit score by taking the following steps.<\/h3>\n