How We Started Getting Our Credit Ready To Purchase A Home
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When we first started couponing, we had to dig ourselves out of a HUGE hole financially. One of the best ways to start this is to start some kind of savings. I would recommend having your checking account auto-transfer $10 from your checking to your savings once a month… even if you need to withdraw that money to put it back into your checking account. Just the habit of the money moving is going to be huge, and when you don’t touch the money, you will get a huge sense of satisfaction. Increase the amount that you save every 2-3 months; you will ideally want to get to 10% of your money going to savings (or more!!). Having some kind of savings when you emergency happens (because you know it will) means that you are under so much less stress, and it also means that you are not borrowing money (from credit cards, family, etc), and just puts you in a significantly better position. Additionally, you need to start looking at your debts, and what you owe to where.
The companies that we used to fix our credit, handle our debts, and really be able to work through any issues were Credit Sesame and Credit Karma. I would recommend signing up for both, but keep in mind that these two companies are COMPLETELY free, and do NOT require a credit card. There are many other companies that will “help” you with your credit, but you have to have a credit card for when the trial ends. I have used both of these companies for both myself and my husband for the past 6 years, and would highly recommend them to anyone who is looking to improve their current situation in any way (yup; that’s you!!). Here are the basics of what you need to know about each:
Credit Sesame is incredibly comprehensive, and the score updates monthly. They will alert you to any changes on your credit, and they give you a full report breakdown. I have used this company for seven years, and every month I get a free credit report and credit score update. They are really AMAZING, and totally free. From this information, you can find out what is actually on your credit. I had a couple of accounts that I had forgotten about, and my husband had a couple of accounts that were not even his accounts (yup!!). The initial step to eliminating the bad things on your credit is knowing what they are in the first place! To get rid of any collections accounts, you can either pay them off, or you can settle with the company. If you settle, you can pay less than what you owe, BUT your credit will show that you settled to close the account. If you are not worried about your credit for the next year or two, or if you have a HUGE mountain of debt, this may be a good option for you. Otherwise, you will need to pay off your debt. You may be able to pay less than what you owe, and get in writing that the company will mark the account as “paid in full”. The creditors get commissioned off collecting past due balances, and most companies have purchased the debt for a fraction of what you owe, so they really would rather get something than nothing. You will also be able to set up payment plans with the companies to get rid of your debt. Credit Sesame is my favorite company due to the comprehensive reports and score, and it is also amazing due to the alerts. Sign up to get your FREE account by clicking the image below:
I have used Credit Karma for 5 years, and it is a really good supplemental credit company. This company is another FREE company (not some kind of free trial or something…), and will update your score weekly. There are not account alerts, BUT this company is great for any disputes that you may have. Once you know what is on your credit, dispute anything that is not yours. You can easily file a dispute online through Credit Karma, and the collections agency has to prove that the debt is yours, or they are required to remove it from your credit, and notify the other two credit bureaus. In addition to the dispute function, the other thing that I really liked about Credit Karma is that you can see how different items will impact your score. For example, letting just one account fall into collections, or adding another $500 towards your debt payments. You may be surprised that if you add 20% to your debt payments that you will not get out of debt faster; it may actually be beneficial to you to just add the extra payment to your soonest-to be-paid-off bill, and then using that extra money (and the money that is no longer going to that bill) to your next debt. This method of payment is called “snow balling”, and it is how we got out of debt. By using their Score Simulator tools, you can help create a plan for yourself. In order to sign up for Credit Karma, click the image below.
Remember that you did not get into this hole overnight, but you can get out in a surprisingly short period of time, as long as you are focused on what you want to accomplish. Even $25 a month payments will chip away at whatever you owe, and you will be well on your way to fixing your credit! If you already have great credit (to which my grandfather would say, “Well bless your heart”), you will want to at least get Credit Sesame for the credit monitoring; if you catch an issue quickly, it will have the least amount of impact on your score. I know someone who had a warrant out for his arrest due to legal issues in Kansas, and he has never left the state, so your credit is not the only thing that can be affected by someone using your information. Staying on top of your credit is a VERY important way to make sure that you are able to have it available when you need it. Couponing can save you money, but having a plan and sticking to it is the only way to really make a difference for your family’s future.