5 critical actions a single parent must take to build their credit score | Refresh Financial

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5 critical actions a single parent must take to build their credit score

credit score, build your credit, build your credit score, single parents

When I was 11 years old, my father became a single parent to me and my 10-year old brother. I saw my father struggle trying to make ends meet and keep his head above water. He worked a full-time job, prepared meals, made sure we got to school and did well in our studies. To top it off, he worried about making bill payments and keeping a clean house. I don’t know how he did it all, but I can tell you he struggled. As a single father, my dad had a lot of credit issues because of his credit score -- he talks about it openly with me now and, yet he kept pushing. His goals for us to have a great life while he strived for financial freedom.

Now, as a single parent, can you relate to this story?

If you can relate, then continue to read and learn about the 5 critical steps to take as a single parent to build your credit score for a brighter future.

  1. Get your credit report

 First and foremost, the most important step is to know your starting point. Know what your credit report looks like and what it means. You can get a free copy at www.annualcreditreport.com. Review your report closely for any incorrect debts, bad debts, or old accounts with your ex that need to be corrected. Also, watch out for fraud or identity theft. If you find anything that needs to be fixed, contact the creditor/bank or the credit bureau to resolve it. Also, remember to get everything you need in writing!

  1. Create a better future with new credit

Your next step is to focus on your future by building your credit score. Get one new credit card (just one!) that's in your name only. Have a small limit on it, or better yet, get a secured card—these are both great options. Begin putting small charges on the new credit card, and keep your balance within reason, so not more than 20 percent of your limit. Use the card regularly, and keep your balance low, or better yet, null.

  1. Create healthy money habits as a single parent

Another critical piece to raising your credit score as a single parent is to create some healthy money habits that become part of your lifestyle overtime.

  • Plan your budget accordingly so that you you can pay your expenses, first off. Also, have money set aside for an emergency fund. Make sure to stick to your plan. If you need help from a financial planner, make an appointment to figure out how to do this.
  • Pay your bills on time.
  • Pay your bills in full.
  • Keep your credit card balance under 20 percent.
  1. Be consistent and patient with your credit score

Anything great in your life takes time—it doesn’t happen overnight. Just like a seed needs consistent care, so does your credit score. Be consistent, and after six months, and then twelve months, you will see your credit score go up. Keep going, don’t stop, and you’ll start to see improvements. You will notice that you have more credit options available to you, and you can begin to open other credit accounts to help your score grow some more.

  1. Use credit wisely

It’s important that as a single parent you pay even greater attention and manage your money and credit cards wisely—and by that, I mean make sure you use your credit to help you reach a milestone, such as buying a car or a home. Avoid using your credit to finance your monthly expenses; you’ll soon get trapped in revolving debt. Here’s a great article on how to grow your credit score.

Continue to learn about managing your debt and credit wisely link by following Refresh Financial’s blog.

 

Shenaya Sweetman is the Content and Social Media Specialist at Refresh. She's an avid writer with an interest in real estate, saving and investing for an early retirement. Passions include online health coaching and live fitness instruction. Her favourite finance blogger is Michelle Schroeder-Gardner.

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