As I mentioned in the initial post on this blog, I’ve been living off the credit map for several years. We have no mortgage and rent from a private party, so those aren’t listed. I have no credit cards. Until buying a new-to-us car in November, I had no debt at all; the car will be paid in full by the end of this year.
The only thing that appears on my credit report is a credit card charge-off from 2002, for a store that has since gone bankrupt. Needless to say, there is a great gaping void where a good credit score should be!
One of my goals for 2010 is to bring my score up to at least 700. I have been tooling around the web to find the best way to do this and came upon this post by The Digerati Life on how to improve your credit score. Very informative!
My first step was ordering my credit report and correcting errors. I was surprised to find errors on mine, given its relative lack of use! I also signed up with Credit Karma to monitor my credit score for free. As part of my financial management plan, I’ll be checking in on it monthly to see how my goals are progressing.
Next up, I’m getting a secured credit card through my credit union so my credit report can start showing something positive! According to the Bankrate.com article, a secured card requires a cash collateral deposit that becomes the credit line for that account. For example, if you put $500 in the account, you can charge up to $500.
For my purposes, I’ll be using the card to pay my car payment, and ONLY the car payment, each month. The card will be paid off immediately after making the car payment so there will never be a balance on which to pay interest, and it will live in my financial records, not my wallet, so I’m not tempted to use it for other purchases. The extra step in paying the car payment should reflect twice on my credit report each month for the on-time payments of the car loan and card.
Getting cozy with my credit report will help me to establish a positive credit score. Getting cozy with YOUR credit report may show you that your credit is better than expected, that your occasional late payments have had more of a hit than anticipated, or that someone was tampering with your identity. The only way to find out is to look, and you can do it for free.
To see what works for other families, check out Works for Me Wednesday on We Are That Family.
I’ve updated the Goals and Progress page to reflect another addition to the savings fund! I babysat yesterday, bringing in another $30 and bringing the savings up to $243.01.