OnPath Credit Union

Tips for Repairing Your Credit Score


Building a strong credit score over time may seem straightforward. Pay your loans and credit cards in full and on time each month. Don’t keep too many lines of credit open simultaneously. Only use about a quarter of your available credit at any one time.

Unfortunately, if you already have bad credit, some of those best practices can be difficult to implement. This is especially true when you simply don’t have enough income to make full payments on all your debts while continuing to pay your bills.

If you find yourself in that situation, you may be looking for reliable and safe ways to start repairing your credit. Luckily, there are some options.

What Are Credit Builder Loans and Should I Get One?

There are some financial institutions that offer unique “credit builder loans,” but borrowing money for the sake of borrowing money may not be the most productive use of your resources. If you either don’t have any credit or you want to repair your credit, you may be better off contacting OnPath Federal Credit Union and learning about our credit card options, a debt consolidation loan or another type of personal loan.

You may not need to rely on gimmick loans to rebuild your credit since you likely qualify for some kind of safe financing that will be both useful and easy to manage on a monthly basis. A used car loan is often ideal since it’s typically a small and manageable loan that often has affordable monthly payments.

Is Credit Monitoring Worth It?

That depends on your situation and personal preferences. There are many low-cost credit monitoring services that charge a small monthly fee (often around $10) to monitor your credit activity.

You can also replicate what credit monitoring agencies do on your own by making use of the free credit reports you’re entitled to annually. The three credit reporting companies – Equifax, Experian and TransUnion – are required by federal law to give every U.S. citizen a free copy of their up-to-date credit report once every 12 months.

All you need to do is schedule a calendar reminder once every four months to request one of the three credit reports. If you space your requests out every four months, you’ll be able to keep track of your credit report throughout the year without having to pay extra for credit monitoring.   

Consider Credit Counseling

Credit counseling can be informative for many people who may be struggling with bills or poor credit. There’s more to repairing credit and financial responsibility than just eliminating all discretionary spending. You might be surprised at what you can learn that will enable you to continue living comfortably while improving your credit and saving for the future or a rainy day.

OnPath Federal Credit Union members are entitled to free credit counseling services. If you’re a New Orleans resident who wants to consult with a financial counselor, don’t hesitate to become a member and schedule a free appointment.

Look Into Secured Credit Cards

If you’ve recently filed for bankruptcy or have bad credit, you might have trouble qualifying for any kind of credit card. Secured credit cards are an attainable option for people in these situations. A secured card has collateral (a cash deposit you make before you get access to the card) attached to the line of credit. This minimizes the lender’s risk and gives you an opportunity to build and improve your credit, as long as you pay off your balance each month.

Be Wary of Co-Signing

Co-signing a loan for a friend or family member may seem like the moral and nice choice to make when someone you care about is asking for help. Unfortunately, there’s likely a reason the lender wants this person to have a co-signer – they’re likely not a reliable borrower. It’s important to recognize that you will be personally on the hook for the money your friend or family member borrows if they stop making loan payments, meaning their mistakes or misfortune will directly impact your finances and credit score.

Do Your Own Research Before Hiring Companies that Advertise Credit Repair

There are several different types of credit repair services out there. Debt consolidation or credit counseling – like OnPath FCU offers – are the more traditional and safe options. A debt consolidation loan is a personal loan with clear terms up front. It is specifically designed to consolidate your high-interest debt into one, easy to manage monthly payment.

Credit repair companies are often a different story. While some of these companies are well intentioned, others make unrealistic promises about fast credit repair, which they will allegedly perform if you pay high up-front fees. Always do research on these companies before hiring them. If what they’re selling sounds too good to be true, they likely won’t be able to deliver.

Build Your Credit with OnPath Federal Credit Union

New Orleans area residents looking for reliable banking services, competitive rates on loans and credit cards and free membership perks, including credit counseling, should contact OnPath FCU. We have a vested interest in the success of our members and will go above and beyond to provide the assistance you need. Call us at 800.749.6193 to learn more.