A Penny For You

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How is your [credit] karma?

Have you done something wrong in a past life that is haunting your credit score ? Let's get you back on the right track for 2018. Here are some steps you can take to start sending some good ju-ju your credit score's way.

Chances are that if you're battling a credit score demon, you already know what you did wrong. With that being said, it's important that you understand what goes into a credit score so that you can avoid some of the common pitfalls of bad credit karma. One of the most important things to understand is that less than 70% of Americans have over $1,000 in savings, so you're not alone in this financial battle. It's easy to find yourself on the wrong side of being able to pay a bill. 

You're in luck though. There are some companies out there that are willing to overlook your bad karma and help you turn that under 600 credit score into something that you can be proud of.


Best for Scores that Need More History:

Self Lender is a strong option for you if you need to add positive payment history to your credit score or you need an additional line of credit. Self Lender reports to all 3 credit bureaus as an installment loan (a loan rather than a credit card). This means Self Lender checks off two credit score wish list items: payment history and variety for the types of credit you use.

If you sign-up for Self Lender and choose the $25 monthly payment you'll pay $25 a month for 24 months. At the end of the loan, you'll get a check for $550 + any interest you've earned. Users have reported boosting their score by up-to 100 points over the course of their loan. We recommend this product to anyone with bad credit that can afford a $25 monthly payment.

One final note, Self Lender doesn't use a hard credit inquiry to approve you. You'll need to be able to pass a ChexSystems pull to get approved, which generally means that you shouldn't have any checking accounts that have been closed due to a negative balance in the last 6 months.

We love this product for three reasons: 

  1. First, you are building savings, so this is a good forced way to build up an emergency fund. 
  2. Second, your monthly payments are reported to all three credit bureaus, allowing you to build a payment history. Payment history makes up 35% of your credit score. 
  3. Third, you'll get access to your credit score to track your progress and credit monitoring for free.

Learn More About Self Lender here.


Best for Scores that Need More Credit

This one sounds crazy, right? You need more credit to have a good credit score? Roughly 40% of your score is influenced by the types of credit you have access to, and the amount of credit you are using. If you don't currently have a card or if you you only have one card with a low credit line (think under $1,000), opening a new card might make sense. Having another line of credit that you pay off every month will increase your overall available credit, and demonstrate that you can manage lines of credit correctly.

Looking for a new card? Here are some good places to start: 

CardMatch

  • Use Cardmatch to see if you are pre-qualified for any credit cards that have low interest rates or come without an annual fee. CardMatch will pull a soft credit inquiry (which does not impact your credit score) and match you to credit card offers from multiple banks at the same time. This will require your name, address, and last 4 digits of your social security number. Find your CardMatch matches here.

Credit One

  •  If you are not matched to any offers from CardMatch, head over to Credit One. Credit One caters to users with bad credit. They'll also pre-qualify you for a credit card before you apply, so you don't damage your credit with a hard pull trying to get a new credit card. The downside here is that their interest rates tend to be a bit higher. Their annual fees can also be high, ranging from $0 - $99 depending on what you are pre-qualified for. See if you're pre-qualified with Credit One here.


If All Else Fails, Look at a Secured Card.

If you don't find yourself with a match in CardMatch or through Credit One, you will probably want to consider a secured card to start building a credit profile. A secured card will function like a credit card, but your credit limit will be secured by a deposit you put down. There's normally a $200 minimum. Our recommendation here is the Discover it Secured card. It's one of the best secured cards on the market, coming in with no annual fee, and giving users the opportunity to earn 1% cash back on all purchases. Rewards are typically reserved for those with good/excellent credit. Learn more about the Discover it Secured card here. A secured card in addition to a Self Lender account

Don't let your credit karma haunt you in 2018. Make this a year of change and put that credit demon behind you. Live your best credit life.

This post contains links from our partners.

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