My guess is that your credit isn’t too good if you’re a recovering addict. Chances are your financial credibility was one of the first things to go in your addiction. I know my credit score was extremely bad when I was in addiction and early recovery. I didn’t think a credit score that low was possible. A credit card, what’s that? The only way I was going to fix my credit was if I hit the lottery for a trillion dollars. That was until I found the secret to repairing bad credit. Do you want to know how I did it? I am going to explain the easiest way to fix bad credit.
How did my credit get this bad? I asked myself that question again and again. Every credit card I applied for was denied. My pet was sick and I couldn’t get a line of credit through the veterinarian’s office and they help everyone. Personal loans or home loans? Ha, that was not even a consideration of mine at the time.
Money makes the world go round. That’s the cold hard truth. There is no way around it. They say money doesn’t buy everything and it doesn’t. Money doesn’t buy love, happiness, or sobriety. What it does buy is everything that you and your family need to sustain a decent quality of life.
I was pregnant with a baby on the way. My fiance and I were living at my grandparent’s home. He has no credit so, we will not even go there. My whole life I have taken care of myself. Taking care of myself was easy but, I was about to have a family. My goal was to be able to get a home loan in the next 5 years. I haven’t taken a look at my credit score in years. When I finally did, YIKES! Bad, really bad. I won’t give you the exact number but, let’s just say 300 would have been a blessing. Yes, it was that bad.
So how did it get this low? I had two credit cards when I was 18. Both with a couple of hundred-dollar limit. I maxed them out and never got another card.
What about the places I lived at? I’m talking about rent that I didn’t pay, bills that I never paid. Yep, that all affects our credit score.
I was an addict so the criminal life fits right in. What about all the fines I never paid? Straight to the collection agency.
Not to mention, I had a tax lien thrown in on my credit score as well.
As said, over the years of my addiction, I had to learn to fend for myself. I did so very well. Now, it wasn’t just little old me that I had to worry about. Not to mention, I did not dare do anything illegal to get money. I had a family, a job, and was working on building a new life. Criminal charges were not part of my new equation.
So I put in the research and got to work. Yet, nothing was giving me the results I wanted. I wasn’t meeting my financial goals. The money was there yet every finance blog gave different information. That is when I realized, nothing is a for sure thing. Different things work for different situations and different people. Every factor in your personal credit history affects you in a specific way. That being said, it was time to take matters into my own hands.
Here’s my secret to raising my credit score. It worked for me. Three years ago I didn’t have a bank account, could not get a loan, a credit card, NOTHING. Now, my credit score is good. Real good. This fall I plan on applying for a first time home buyer’s loan and there should be no reason I do not get it.
Are you ready for me to break it down?
The Steps To Rebuilding Your Credit
1. Bank Account
I’m sure this is common sense, you need a bank account. You can’t go through life paying with money orders for everything. There are many benefits to having your very own checking account. Plus, in current times, no one carries a lot of cash on them. That little plastic card does so much. It’s easier to simply swipe a card when you go out to eat, at the store, or even to buy stuff online.
Most banks have a website where you can monitor your account at all times. Online you can pay bills and transfer money. Plus, I don’t know about you but, for me, it is easier to save money when it’s in my account rather than in my pocket.
Those of us who were drug addicts probably have not had a bank account in a very long time. If you want any type of credit or comfort of knowing your money is safe, a bank account is an essential element for you to have.
If you have screwed over every bank you can think of and still owe them all money, there is still hope of getting a bank account. You can actually go online and open an account. There are options for everyone.
Not only should you have a checking account but, you should open a savings account. It’s a great feeling to be able to save money now. You need to have money put aside for an emergency. It’s better than keeping money in your home. When people know you have cash stored away in your house, bad things can happen.
Really it’s simple, OPEN A CHECKING AND SAVINGS ACCOUNT! At the very least, OPEN A CHECKING ACCOUNT!
2. Credit Score
Do you even know what your credit score is? Once people know it’s bad, they tend to not even care how bad it gets. Now it’s time for you to take a look at the financial damage you and your addiction have caused. How bad is your credit score? It could be horrid but maybe it’s not nearly as bad as you think.
This is what you do, go to www.creditkarma.com. Sign up and open an account for free. Most credit sites claim to be free but, they are not. They give you so much and then ask you to enter your credit card information and charge you so much for a monthly credit report. Not credit karma, it is absolutely free.
The really cool thing about credit karma is that it does so much more than just show you a credit score. It updates your credit score once a week. Credit Karma operates using the three major credit bureaus which are Experian, Equifax, and Transunion.
Credit Karma gives you tips and recommendations on improving your credit. You can see every single thing on your credit report. If you have an account in collections that you disagree with. You can dispute it through credit karma.
They show you which credit cards you can apply for and what your chances of getting approved are. It’s just great, Credit Karma helped me so much in my journey of rebuilding my credit.
Credit Karma Taxes
Let’s not forget, there is a new element to Credit Karma. You can now do your taxes for FREE! Seriously, it’s completely free. Last year, I paid well over $500 to have my taxes professionally done. This year I decided to do my taxes myself. With turbo tax, I would have had to pay approximately $100 for the tax forms I had to file. Submitting the exact same tax forms with Credit Karma was 100% free. That’s no lie. It’s a great feature. Credit Karma is amazing. I absolutely love it and highly recommend it.
FYI – I did give the link to Credit Karma and I am bragging about their site. It’s not an affiliate link, I am doing this of my own free will. They don’t even know I’m writing this. It’s that good.
3. Credit Cards
Now, this is the key to rebuilding your credit score. Well, this is the way I did it. My credit score was lower than I thought a credit score could ever be. Yeah, it was that bad. I could not get a credit card if my life depended on it. I applied for a credit card with a $250 limit at the local gas station and got declined. Nobody would approve me.
Personally, I know many people who have turned their credit around in a year with the help of credit cards. They would get a credit card, make a purchase, and pay it off immediately. They kept doing this. Over time, credit card offers were flowing in. Their credit score improved. Goal accomplished. Well, if you can’t get a credit card, it makes that process a little more difficult.
This is what I did. I went to my bank where my checking and savings accounts are. Since I’m telling you exactly what I did. My bank is Dollar Bank, they are great. The bank employees are helpful and always answer my questions. Yes, I am the type of person who asks three hundred thousand questions. How are you going to know unless you ask? Right?
The bank manager suggested that I get an unsecured credit card. What?
Unsecured Credit Card – The Secret Weapon
An unsecured credit card is kind of like a prepaid credit card. Yet, it counts towards your credit. For example, I want a $500 unsecured credit card. I have to put $600 down and I get my credit card. I pay for it in advance just in case I don’t pay the credit card bill. This way, the bank is safe and it’s covered if I max it out and refuse to pay my credit card bill. Technically, I already did. The thing is that once my credit score starts to improve and I start getting other credit cards, I can close this account once it’s paid off. Then, I get the $600 back I originally paid for it.
This is what I did, I took out a $1000 unsecured credit so I paid $1100. I would make a purchase and pay it off. I kept doing this. Within, 6 months the credit card offers were flooding in. Also, Credit Karma did recommend the best credit cards for me. Now, I have 6 credit cards and I closed the unsecured credit card. I received my $1100 the day after I closed it.
The Effect An Unsecured Credit Card Will Have
One thing to keep in mind is that this will be the first credit card on your credit score. The length you have open credit accounts impacts your credit score. If you can’t make the payments or max your unsecured credit card out then your credit will get even worse, if that’s possible.
An unsecured credit card is the easiest way to fix bad credit when you have no other options. Yes, you must have money to put down on this card. Now that you are a recovering addict and you have a job, that should be no problem. It won’t take long to save up the money for the initial down payment that you need. You can get an unsecured for a few hundred or a few thousand. Remember, the higher you go, the better it is and faster it will affect your credit score. Don’t go crazy. If you do wrong with this card, you will continue to destroy your credit.
In my experience, an unsecured credit card is the absolute easiest way to fix bad credit. It’s not magical, it will not happen overnight. Fixing your horrid credit should be a GOAL in sobriety, a goal that is easily attainable.
Sharing The Secret
That is how I did it. An unsecured credit card was the absolute easiest way to fix bad credit. Finally, I was able to get on top of my finances. I reached another of my recovery goals. It’s a great feeling. A good credit score is an essential step in getting the things you need in life.
Within one year, my credit scores improved by a few hundred points. Crazy right? Before I did this, I couldn’t get a credit card, a loan, or any credit line. Now I have multiple credit cards with offers for credit coming in continuously.
As Easy It Sounds
Buy something on your credit card and pay it off. Keep doing this over and over again. When you get a new credit card, do the same thing. I promise that this will work. You don’t want to get a million credit cards. You need active credit accounts to improve your credit score. My suggestion is to have more than one credit card but, you do not need to come close to double digits. That is way too many and not a good idea.
Read the information before you apply for new cards. The credit limit, the APR, the fees, late payment fees, rewards, increasing balances, balance transfers, etc. Even if you are clueless at first, you won’t get a bunch of offers to begin with. They will come in slow and steady. A few credit cards with a couple hundred-dollar limit that will increase as you make payments. This is what you want and what you need to do.
It’s really that simple. Your score will not increase instantly but, gradually. In no time at all, you will be right where you want to be with your credit. All you must do is follow this game plan. The secret to repairing your bad credit is this easy.
Give it a try. Comment below to let me know if you have had the same fantastic results.