For months, Justel Bolden got up early and rode the bus to her child's daycare, then took the bus to classes at FSCJ. After school, she rode JTA to work at a Westside pawn shop. She wanted a car but because of a low credit score she couldn't get an affordable loan. "I never thought to work on my credit because I didn't know how much I would need it," says Bolden.
Bolden now owns a car thanks to the Family Foundation's "Ways to Work Program." It's designed to give low income individuals not only a car loan at a good interest rate but also provides budget counseling and financial coaching. "Two and a half years of paying your bills on time goes a long way toward increasing a credit score," says Martha Cox, Vice President of Family Foundations.
Cox says there are tried and true ways to raise your credit score. Opening a bank account could ding you. If you take your money elsewhere expect the new bank to check your credit before opening your account. That inquiry may shave a few points off your score.
Using only cash will not always help your score. Cutting up your credit cards is fine but don't cancel a bunch of accounts at once. Lenders want to see that you're using credit, even a little bit if it, in a disciplined manner.
Time matters more than you would expect. It takes years to build a stellar credit score. People with the highest credit scores, 780 and above, have average credit accounts that are 20 years old. "What you're trying to do with managing your credit is to think about it long term," says Cox.
Also, paying off debt will not instantly change your score. Your score will get better but delinquencies will stay on your account for 7 years and bankruptcies for 10.
Most importantly, pay your bills on time and don't max out your credit cards.
Justel Bolden is getting a second chance with her financial future. This time she says she's not going to make mistakes. "I'm looking forward to getting a house in the near future. I need a good credit score for a loan with a low interest rate."
To learn more about Family Foundation's "Ways to Work" program visit their website at familyfoundations.org or call 904-396-4846.