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A Crash Course on Fixing Your Credit

  • March 1, 2019

Need to repair your credit score? It won’t happen overnight because your credit score consists of years of past behavior that are reflected on your credit report. But with the right steps and perseverance, you can restore your credit over time.

Make on-time payments

Paying your bills on time is the important first step to improving your FICO score. Consecutive late payments will negatively impact your score, but you can turn the trend around by paying before the due date each month. It may take up to 6 months of making on-time payments to see improvements in your credit score.

A great way to pay on time is setting up automatic payments. Most creditors offer e-bills that alert you when your payments are due. SkyOne loans and credit cards come with a convenient auto transfer feature, where the payment comes directly out of your checking or savings account before the due date, helping to avoid late or missed payments.

Watch your credit purchases

Your FICO score is determined by the amount of credit you use compared to your credit limits. So avoid maxing out your credit cards. That said, don’t rush to destroy your credit cards, because even closing your credit cards accounts can lower your credit score. The goal is to keep a healthy cushion of available credit over time.

If you’re searching for a credit card that helps boost your credit, contact us today. We’ll guide you safely to the best option.

Keep tabs on multiple hard inquiries

Hard credit inquiries occur when you apply for a credit card or loan (soft inquiries, by contrast, happen as part of background checks or preapprovals, and don’t affect your score). If you apply for several loans or cards at once, your score could take a significant hit. Companies such as department stores will push you to open new cards to get a discount on purchases. While this could be good savings up front, it can negatively affect your score.

Re-evaluate your budget

As an alternative to applying for more credit to get the money you need, take a hard look at your budget instead. Figure out ways to cut back on spending, and see if you can make bigger payments to your cards or loans every month. Larger payments will reduce your debt (and related fees) quicker. You may also want to lower your credit card spending. As a result, your credit score will improve over time.

If you have revolving debt, consider consolidating it into a closed end SkyOne Signature Loan. Aslong as you don’t rack up debt quickly after consolidating your debt, you should see your score increase.

Understand the types of credit

Generally, there are two types of credit repayments: installment credit and revolving credit. Installment credit, or closed end credit, is paid back with scheduled, periodic payments and is typically used for real estate and auto loans. Revolving credit has open ended payments, and any funds repaid are available to be borrowed again, as is done with credit cards and home equity lines of credit.

Installment credit and revolving credit may come as secured or unsecured loans. Since secured loans require an asset held as collateral (such as your car), they are less risky for the lender, and usually have lower interest rates. Unsecured loans require no collateral, and usually involve a higher interest rate, since they’re approved solely based on the borrower’s creditworthiness and promise to repay.

Review your credit card statement

Did you know your credit card statement has a helpful Minimum Payment Warning? This “warning” provides an estimate of how long it can take to pay off your credit card balance if you make only the minimum payment each month. It also shows you how much you can save by paying a slightly larger amount, and paying off your entire bill in 3 years.

The bottom line: paying the minimum balance will not only hurt your credit, but will also keep you in debt longer.

We hope you’ve found these tips helpful. At SkyOne, we are here to help you build up your credit score while assist with your borrowing needs. As a SkyOne member, even if you have a blemished credit history, we will find a way to help you. Your FICO score only determines the rate you pay on your loan. We won’t approve or deny your loan based on your score.

Speak to a SkyOne Lending Specialist for more guidance on improving your FICO credit score.

Contact us at 800.421.7111.


Courtesy of BALANCE, and Dan Mostovoy, SkyOne Lending Manager



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