Archive for the ‘Credit Cards’ Category

Raising Your Credit Score with Multiple Payments

Friday, December 21st, 2012

Have you ever thought about making more than one payment per month on your credit card? The due date is not the only time during the month you can make a payment; you can send in multiple payments during the month. The Convenience and Benefits of a Credit Card I tell my workshop audiences all…

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Reestablishing Credit During the Recession

Monday, March 28th, 2011

A number of the people I counsel want to know how soon they can after . The prerecession standard advice was two years for a credit card with decent interest and four years for a mortgage with indecent interest.

But that was then. Now, because so many people have bad credit because of , late payments, and bankruptcies, it’s hard to say what decisions the credit issuers will be making in the next several years. Will they be more forgiving because of the need to pull in people who might not have qualified a few years ago, or will they get tighter and not give credit at all until more time has elapsed after the bankruptcy? Only Fair Isaac (FICO) knows for sure, sort of.

For sure, if you want to reestablish credit, the old ways are probably still the best ways. Get a major credit card, periodically make purchases, scrupulously make your payments on time, get a second card, same thing, work to build your credit line, never max-out your cards, and so on. There are a number of other tips on the Fair Isaac website at that will help you lift your credit score to the maximum extent possible. The more you follow that advice, the better off you’ll be. You can get Nolo’s , by Robin Leonard and Margaret Reiter (Nolo) for even more on this subject. Or check out the free articles and FAQs in Nolo’s area of its website.

But should you even try to get your credit back? I often tell people I’m counseling that working to get your credit back is like an alcoholic learning how to drink better. Credit is simply the opportunity to go into debt, and once in debt it’s really hard to get out. When you’ve received your bankruptcy discharge you will usually be completely solvent (except perhaps for debts like student loans and recent income taxes). Why spend energy for the privilege of going back into debt? There are lots of reasons why people feel it’s a rational thing to do, but all you’re really doing is preparing to live beyond your means.

Sure it’s nice to have credit for an emergency, but people would be much better off reigning in their spending and saving as much and as fast as possible, and using their savings if necessary for an emergency. You may not feel like you’re addicted to credit or spending (same thing), but chances are you are and are just in denial. Now I would never say this to your face because you would just deny it and be angry at me. Well, maybe you’re still angry at me but at least I don’t have to see it. Please accept the fact that my intentions are good — to keep you solvent and out of debt.

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