If you don’t have good credit, it is nearly impossible to correct the problem overnight.
Stacey Hankey, chief executive officer of Lanco Federal Credit Union, joined “Good Day PA!” with tips on how to repair your credit.
Hankey says repairing your credit takes time, so beware of advice that claims to fix it fast. If it sounds too good to be true, it probably is.
Repairing your credit is more than repairing your score, but it is a good place to start. Look at it once a year and be sure it is accurate and work with creditors directly to remove items that are incorrect.
The best way to reduce debt is to develop a plan. Hankey says you should look at all of your debt and determine how much you owe on each loan or credit card and what is your highest interest rate. Come up with a plan to stay current with all payments, but focus on paying extra on the highest interest rate loan first.
Be sure to pay off all debt because if you default, it will stay on your credit report for up to seven years.
Contact your creditors to discuss a payment plan or see a legitimate credit counselor. Many credit unions have loan officers or financial planners that can help you.
Having too many credit cards open can hurt your credit, even if they don’t have a balance, so don’t open new credit cards unless you really need it. Getting coupons and discounts for using your credit card can put you right back to where you started if you don’t manage your credit.
The length of your credit card will also impact your credit score, so open a low-interest rate credit card from a credit union and hang onto it.
Hankey says the most important thing to remember is that successful credit repair will increase your credit score and lead to saving money in the future.