June 29, 2023


Rebuilding your Credit Score: 5 Steps for a Fresh Start

In the US a good credit score helps you get lower rates on pretty much everything, from loans or rents to utilities such as water, gas, internet and cellphones. It can also affect the insurance quotes you’ll be offered. We know having a less-than-ideal credit score can be discouraging but the good news is that it's not a permanent situation. 

Let’s do a small recap on how a Credit Score works, on a scale from 300 to 850 you get more points or less points depending on how you are managing your accounts and paying on time for the services you contract. (Click here to read about What is a Credit Score).

With determination and the right strategies, you can improve your creditworthiness and set yourself on the yellow brick road to a better financial future. In this blog post, we will explore practical steps you can take to rebuild your credit score and regain the control for your financial freedom.

1. Take a Look at your Credit Score

Knowledge is always the key. There are three credit bureaus where you can get this report from (Experian, Equifax, and TransUnion). These bureaus are entitled to give you one free report annually, after that you have to pay for it. When you have your report in your hands, review it for any errors that may be affecting in a negative way. Dispute if you find any inaccuracy and make sure they are corrected. 

Note: If you get auto insurance with OCHO we will share with you your report for free! 

2. Make a Budget and Stick to It! 

Take out your Calendar! Budgeting is one of the best activities for a healthy financial plan. It helps you understand your finances, evaluate your income, your expenses and makes you set a realistic spending plan. Prioritize essential expenses and assign certain funds to paying off existing debts. 

3. Pay your Bills on Time

If you buy something with credit or on any payment plan it’s always  better to pay on time. Late or missed payments can have a significant impact on your credit score, making you look as a high risk customer. So set up reminders, automate payments and consider using budgeting apps to help you stay organized. 

Note: Getting auto insurance with OCHO will help you improve your Credit Score if you are consistent and avoid gaps! 

4. Reduce your Debt

High levels of debt can negatively affect your credit score. So develop a strategy to pay down your outstanding balances systematically. Consider focusing on high-interest debts first while making minimum payments on other accounts. Then gradually increase your payments.

5. No New Credit, Unless Necessary

Avoid taking on new debt unless it’s absolutely necessary. Each  line of credit is an account you have to be careful with, so before taking it, think if you really need it or if its going to strain your financial situation. 

Building or improving your Credit Score is a journey that requires commitment, discipline, and patience. By implementing the strategies outlined in this blog post and making positive changes to your financial habits, you’ll definitely improve your creditworthiness over time. Remember, consistency is key. You’ve got this! 🚗💜 

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