What Are You Waiting For? It’s Time to Repair Your Credit
Sunday, March 6, 2016

 By Porsche Miles-Grant

In life, you have 3 things; money, credit, or both. If you have money, more than likely you don’t need credit. Those individuals are able to buy all the things they need, want and desire. Unfortunately, if you’re like me, you will definitely need credit when making big purchases such as buying a home, car, or taking a vacation. Furthermore, if you are lucky enough to have both credit and money, you are living the America Dream. 
However, many Americans are not privilege enough to have $50,000 dollars accessible in their checking accounts. Therefore, they are in desperate need of credit. But credit isn’t granted to just anyone. Lenders heavily rely on an individual’s credit score and history to determine their credit worthiness. In other words, your credit score indicates how likely you are to repay your loans on time. FICO scores are the most commonly used model, typically ranging from 300 (lowest) to 850 (highest). Data from FICO shows that the national average FICO score is at an all-time high at 695, compared to 688 in October of 2005. 
According to the Corporation for Enterprise Development, studies found that 56% of consumers have subprime credit scores. Consequently, those individuals are subject to a plethora of missed opportunities. Such perks include access to employment, lower interest rates, and the chance to borrow money when needed from financial institutions. Nevertheless, your current credit score is not permanent. If you work hard and smart, a person is able to increase their credit score over time. Though it takes dedication and will power, it is definitely achievable. The ball is in your court! 
Here are some steps that can lead you to financial success. First, it is imperative to obtain a free credit report. Every consumer is entitled to one free credit report a year (annualcreditreport.com). After receiving your report, carefully analyze it. Make sure that each debt is actually your, and that you’re not a victim of identity theft. Once you have established that the debts are yours, start with the most recent debts to pay off first. 
Collection accounts may be reported for seven years plus 180 days from the original date of delinquency – the date he first fell behind with the original creditor. After that 7 1/2-year time period elapses all collection accounts related to that particular debt can no longer be reported, regardless of whether they are paid or not. Smaller bills, pay off immediately. This is a quick way to increase your score. With higher bills, call the company or lender provided on your report, and ask about a payment plan. 
Moreover, it is critical that you pay on time, every time. Missing one car payment, could potentially lower your credit score 120 points. While repairing credit, it is best not to open up more lines of credit. A personal finance rule is to never use more than 30% of your available credit if you want a good score. Lastly, remember that closing credit cards have the potential to lower your score. So, if you are not planning on using that card again, simply hide it or cut it up, but don’t close it.
Porsche Miles-Grant is the Community Engagement Coordinator at 
CASE Credit Union. Contact her at 517.367.1001 or send an email to Pmilesgrant@casecu.org.  Log on to  www.casecu.org for more information.
This article was printed in the May 6, 2015 - May 19, 2016 edition.

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