Having terrible credit is one of the hardest things that a person could ever face in life. While it is possible for you to live a relatively normal life as a high school or college kid who only uses their salary to purchase goods and items, it is almost impossible to live an adult life with all the responsibilities that adults have if you do not have stellar credit.
You will not be able to buy a house, your ability to own a car will be stifled and any, other big-ticket items that will establish your credibility as an adult will be impossible to obtain. If you’ve come across any Lexington Law Firm reviews online, you’ll likely see the same advice.
Paying Your Bills on a Credit Card
One of the quickest ways for you to repair your credit is to pay all of your bills on a secured credit card. By using your secured credit card to pay off all of your bills, including your phone bill, rent, heating, etc. you are showing the credit companies that you are responsible with the money that you are given.
The great thing about using credit cards to pay off your day-to-day debt, which is proven to be a lot, is that you can very easily pay it off. Think about it: right now you have a set amount for rent as well as food, clothing, heating, and gas, electrical, phone etc. that you would probably charge to your debit card. If you were to charge that to an unsecured credit card, you could build your credit while essentially paying the same, exact bill, with just a tiny fraction of interest. Not a bad way to quickly build your credit.
The reason that using secured cards to pay all of your debts is such a viable way to increase your credit score is because, while you may have five or $6000 in debt, you have amassed 20 or $30,000 in debt on your prepaid card that you have proven to have the ability to pay off very quickly. This act of goodwill towards creditors is a signal to them that you can easily pay off most of your debt.
Applying For A Personal Loan
Apply for a personal loan and use that personal loan to pay for itself. So, you take out a personal loan of $10,000, and you pay off all of your credit card debt with that $10,000 that you borrowed from the bank and you pay the bank back with the remaining $4000 in your account.
You do not buy any frivolous items with this money. You did not go on shopping sprees in Vegas or live beyond your means in anyway. This money is strictly to pay off debt and to show your creditors that you can quickly reduce your debt to zero. You may have three years to pay off the personal loan of $10,000 and that can be done with a manageable $300 a month payment. Not bad for someone who makes over $3000-5000 a month anyways.