Credit scores are something we don’t usually think about, but they can have a huge effect on our finances. Many banks use credit scores to determine if you’re allowed to take out a loan for your house, your car, or any large purchase. The better it is, the better your interest usually is, and vice versa. If you’re wondering how to improve your credit score, then today’s guest post is for you.
Our guest blogger for today is Bushra Syed of Bushra’s Lifestyle Blog, a mom and lifestyle blogger who blogs about home life and blogging.
How to improve your credit score
You must be looking for “how to improve your credit score” if you are reading this post. This post is absolutely based on my personal experience.
Before I share with you all those tips on how I improved my husband’s credit score, I need to tell you briefly about myself. I don’t have any degree in financial management, Maybe a short course I took in college or after college on how you manage your finances, but that’s about it. I work full-time as an ultrasonographer, and I’m a full-time mother as well. I do blogging in my free time.
When I moved to the States from Pakistan almost 12 years ago, I had no clue what “credit score” meant. I was a young and naive girl who had no clue about how even marriage worked. I knew how to shop and how to spend because that’s how it was in Pakistan. I bought anything I wanted to. After my arrival, I only spent 29 days relaxing home and then I started working. To this date, I have been working every single freaking day.
So I was new here and honestly, I didn’t care that I had to take responsibility to pay bills, etc. I thought my husband already had a system set up, so I figured we were okay. Neither did I have a clue about my husband’s broken and messy credit history. How the heck was I supposed to know? For the first five months, he was the “in-charge” of money and was taking care of bills.
Getting into the life of credit
I opened up an account for me with DCCU (Dane County Credit Union). I like credit unions as opposed to banks. Credit unions are much better than other banks such as Chase, etc as I have had experience with both.
My bank was right at my workplace, so I quite often was saying “Hi” to the bank manager and talking to him about finances, etc. Once he said, “You seem very good at financial management, you should work for us”. I just laughed and walked away.
For almost six months of living in the States, I decided that I was going to buy a car. In fact, I met a Filipino girl and we became really good friends. She had a brain similar to mine. A very smart chick. Once we were having lunch together and she was looking at the paper and pointed to a car. “Hey Bushra”, she said, “Buy this car”. I am like, “No I am okay so far”. She said, “No, you need to buy one”. I said, “Okay, let’s do that”. The next day I was talking to the bank manager about getting a loan. He said, “Okay, let’s figure it out”. Well, that was the moment, that one freaking moment, that put all the responsibilities on earth on my shoulders. I know you are wondering, “Okay talk now how you fixed it”.
But, dear friend, you need to know how I started all of this.
The consequences of bad credit
Within a few minutes, he told me I couldn’t get approved because of my husband.
I said, “No, no, no, you much be mistaken, he has a pretty good job”. He said, “Yes, but he has so many credit cards open and not paying on time”. “His credit score is 320”. I had no idea what that was about, though. I said, “Okay I will ask him to get better at paying them”. The guy just looked at me and smiled. He clearly got an idea that I am a clueless idiot.
Well, I went home and I didn’t really talk much about that. [I was pregnant then with my first daughter] and was very sick. I was staying home most of the time due to being sick. My husband had a bad habit of never opening his mail. I was sitting on the corner of the couch and was very ill. I wanted to get my mind off of my sickness and suddenly my eyes went on a pile of letters.
That was the first time I ever opened any of my husband’s mail.
The first letter I opened was for his student loan asking him to pay $48 thousand at once. The second letter was from Capital One Credit and the other letters were mostly bills with tons of interest add-ons.
I started crying so hard. My husband came from the other room asking what happened and I said, “This is what credit score means”. “You are in so much debt”. ”I wish you would have told me before we got married”. Well, he said, ”I didn’t want to lose you, I was afraid you would say no to me”.
Heck yeah, I would have!
Finding out the truth
I told to be honest and tell me everything about it. He went to the office room and brought another big box full of letters and they were from the IRS. He was supposed to make payments to them as well. Apparently, he was making a good amount of money that he owed IRS. I called my mom and asked her if she could send me a ticket because I have to leave this guy instantly. She talked to me for two hours and calmed me down. She is very good at manipulating all of us siblings. But man, I was mad!
Then after I was done crying and ran out of tears, I asked him to bring out more if he had any more. He brought all the letters. I am not kidding, there was one more little box. He had so many small loans! I couldn’t sleep that night.
The journey to good credit
In the morning I talked to my bank manager. We pretty much became friends. I told him everything, and he gave me some tips. At that time I didn’t know that you can get help from such people as Dave Ramsey. I love his program, but I didn’t discover him til my husband’s score was already over 830.
Okay, let’s jump into how I did that.
Steps to improve your credit score
A joint account
The first thing the bank manager told me was to have your husband under my account since I was new and I paid everything on time. I was pretty clean. So I added him to my account. I mean we made a joint account.
Buy a credit card
Since I was new here and nobody was ready to give me a credit card, I researched around and purchased my own credit card. Yes, I purchased from Harrison Bank for $500. They report your credit score like a real credit card. And once you build your history, you can close the card and get your money back. Using this card improved my credit score for 750 or over and then I started to get different credit card offers. I think it took me around 6 months. Finally, I opened up a credit card with Citi Bank and added my husband under me as well. But I never gave a card to my husband to use though. Yeah right, I was not going to be crazy! It’s not only for a married couple. If you are not in a relationship then you can open one up with your parents if they have good credit.
The other things I did I were that I went over each letter and talked to people that if I pay them in full could the give me some kind of discount. Indeed, a lot of people did give me discounts. With this method, I paid off all his small loans within two months. It was a tremendous help.
Set up payment plans
I called the educational loan department and IRS and talked to them and became a guarantor that I would make payments for my husband. They helped me set up payment plans. There are really nice people out there. You just have to ask for help and take initiative.
Cut down extra expenses and set up a budget
We got rid of cable and cell phone contracts and just bought those cheap Tracfones with $100 cards for the whole year. I switched the home phone from a monthly payment to a yearly plan for $50 a year as opposed to $20 a month. So every penny we could save could help us pay his debt.
Pay your bills on time
Always pay your bills on time. That’s the key to everything, especially here in the State where credit scores are very important. Keep track of all the expenses.
Don’t max out your credit cards
Keep your balances low. As I learned with experience and researched around, I was only using $100 out of a $500 credit limit. Since my husband was a secondary user with all those above steps, within 4 months his score went up 200 points, so now his score was 520. I was even able to apply for a car loan! When I bought a car I added my husband as a co-owner as well, which really boosted his scores even more.
Then I decided to buy a house. But again, the loan officer told me that my husband’s score is only 530. Now, so far we are 6 months into rebuilding his credit score.
The loan offer did give me several great tips, however.
Monitor your credit report
I got my husband’s free credit report. You can get a free report once a year. On his report, I noticed a few collection agencies. There were few small loans I made deals over, but they never reported them “paid”, they instead showed them unpaid. I called them back and it was a long argument. I called all the credit bureaus and filed for a dispute.
So, keep every record and write down when and who you spoke with. One loan was for a very popular cellular company. I would not like to mention the name here though because they would not listen to me at all.
Get a lawyer if necessary
After a few more months of clearing things up for my husband, I went back to the loan officer for the house and he was very surprised by how much my husband’s score was improved. He said, “I can’t believe it, you are so magical!” He pulled up our scores and he considered me a primary applicant and my husband the secondary applicant. Everything else was good, but the cellular company’s loan was still there. I had all the proofs and documents. Then that loan company gave us a free lawyer who helped us to clean up the rest of the mess. He was an amazing guy who had the credit bureaus delete all the paid stuff and left no record for anything.
Honestly, it’s sometimes worth hiring a lawyer after you get done with everything. A lawyer can have those bureau delete your messy history and you pretty much left with a clean and clear history. It improved my husbands’ score to over 600. We were able to buy a beautiful house. Check it out here. We no longer live in that house since we moved. I also did a post about how I sold my house in 3 days.
Last but not least, you can’t improve your credit score overnight so be patient. Those are absolute lies when people say and tell you about this. I have been through all that. It took me a good 10 months, but ever since I have maintained everything for him. I Hope it will help you and you can improve your scores as well. Good luck with your journey, and you can absolutely contact me for any questions or suggestions you may have!
That was such an interesting and helpful read! As you can see, improving your credit score isn’t easy, but it is doable, especially if you’re determined! Just like Bushra and her husband, you can always turn things around, no matter how bleak it may seem. For more advenures, check out her blog at Bushra’s Lifestyle Blog.
Also, if you want to write a guest post for this blog, feel free to send us a message at firstname.lastname@example.org!