Credit Repair: It’s More Than Fixing the Past

An important part of repairing your credit is how you manage your credit and finances today.

It’s not enough to clean up mistakes of the past. What you do now and going forward is of top importance.

I was speaking with a credit repair business owner recently, and he told me that about half of their clients accrue a new late payment — while they are in the credit repair program! That makes no sense!

If you are paying someone to clean your house, would you bring new mud into the house at the same time?! That’s what it’s like when you fail to make a payment on time while you’re trying to work a credit repair program.

Here are 5 things you must do AT THE SAME TIME you are working on repairing your credit profile:

1. Pay your bill the same day you receive it. That way, you don’t risk going late. But also, it helps to keep your balance lower on an ongoing basis, which can improve your score. (Based on your balance-to-limit ratio, credit points will vary.)
   
2. If you aren’t good at bill paying or dislike the task, set up automatic payment. That way, you will never be late.
   
3. Monitor your auto-pay account so that a so-called late payment doesn’t pop up due to something like an annual membership fee or the payment date falling on a Sunday when your bank is closed.
   
4. Don’t purchase more than what you can afford to pay in full when the bill comes in. This applies to all your “wants.” Don’t use credit to buy fun tech toys and pretty things you cannot honestly afford. This does not apply to an emergency, such as your water heater going out or your car breaking down.
   
5. Prioritize your loans and credit cards OVER medical bills. Medical bills don’t go on your credit report until they are six months past due, giving you a lot of time to work out a payment plan if needed. Never let your loans or credit cards slide because of a medical bill.
   
   Building good financial habits is worth the effort. Educating yourself about how credit works is worth the time.
   
   Part of self-respect is having respectable credit.
   
   Thank you for reading. Your comments and questions are always welcome.