Even seniors can find themselves in need of credit repair. At this stage of your life, inflation causes expenses to rise, but your income does not follow. It is fixed. The following borrowing tips can help you repair your credit.
1. Lose the credit cards.If you are in need of credit repair, the first thing that you must do is get rid of your credit cards. You must pay off your credit card debt, but you can't do that if you are charging.
As seniors, some of your expenses are less than they may have been before, but others are more. You probably do not spend as much on clothing or transportation, but groceries and healthcare continue to rise with inflation. Also, you may have grandchildren you wish to spoil. However, acquiring too much debt puts stress on your life. Credit cards provide a false sense of means. Since using credit cards is borrowing money, you have to repay the debt plus interest. Instead of racking up credit card debt and needing credit repair, put them away and focus on paying them off.
2. Make sure you are not supporting your children financially.Now is the time to focus on your financial needs. After a lifetime of supporting your children, it is now their turn to support their own families. With your fixed income and need for credit repair, make sure that your money is going toward your financial obligations, not theirs. Once your credit is in good shape, then you can be generous by doing something like giving to your grandchildren’s college fund.
3. Consider using your home equity.This is tricky for seniors but may be necessary if you need credit repair. As a senior, you probably live in your greatest asset, your house. With your home equity, you have significant funds. You can get a home equity loan to help pay your debt to improve your credit. However, once you use your home equity, it is gone and then you have to make the monthly payments. Consider this option carefully before choosing it for credit repair.
4. Consider a reverse mortgage.A better option for using your home equity is a reverse mortgage. A reverse mortgage is designed to turn your home equity into cash. Instead of you making payments, the lender makes payments to you. The loan is then repaid when you sell the house, or after you pass away. This can be a good option for seniors looking for credit repair.
5. Make a budget and stick to it.This may be the most important time in your life to budget. It can help with your credit repair by helping you live within your means. Look at how much money you receive each month from pensions, investments, or Social Security benefits and add up all of your monthly expenses. Then, look at how much money you actually need to cover living expenses and debt payments. If you have extra money, use it to pay toward the principal of your debt that you are paying off for your credit repair. This will help alleviate your debt and improve your credit rating.