How to increase your FICO score so you can get credit

I’ve seen a rash of search terms that tell me new readers are looking for information about bad credit and FICO scores that are too low to get a loan. I’m afraid I don’t have any magic cure for past problems. I’ve been in the situation where “life events” pile up and suddenly you can’t seem to make any headway no matter what. Working yourself out of that hole is VERY possible, but it does take some concentrated effort and you can’t give up and get stupid in the middle. Here are some suggestions, depending on your situation:

If you need to refinance NOW to get out of an adjustable mortgage and you have bad credit, look on this site for the page with a list of lenders. Get hooked up with a few of them and you should have 5 or 6 different loan officers calling to try and help you. Tell each one that you are working with several people to try and solve your problem and you want them to take a look at your credit before you commit to any one of them.
If you don’t know your credit score, it really is time you found out. This will save you time and money if you’re spinning your wheels now trying to find a lender to work with you. There is no point in calling A paper lenders all day if your score puts you in the D- category. You also can’t expect to get the lowest rate if you’re not A paper quality, but you shouldn’t settle for a D- rate if you’re B+, either.
I haven’t had time to verify this, but I was told that if you ordered your report and FICO score from My FICO, it wouldn’t count against you as an inquiry. I provide links to MY FICO on this site, but be sure you order a package that gives you the FICO score as well as the credit report. Some packages have one or the other, but not both. You probably don’t need monitoring services or any other specialized services right now, and you can come back to them later if you want to. The free credit report you are entitled to annually DOES NOT include a FICO score.
If your score is under 620, then you are statistically a very high risk borrower. The lower the score, the more chance there is that you will default. How does the lender know that? Your past experiences with credit provide the lender with a pretty good idea of how you handle your finances. If you’ve defaulted on loans in the past, chances are you’ll do it again. If you’ve experienced a one-time traumatic “life event” that put you under, be ready to explain what happened and how you are recovering, including what you’ve learned about preventing it from happening again.
If you’re over your head in debt and just have to find a way to continue living indoors and feeding the kids, then you probably need some serious professional help. The options at this time seem to be declaring bankruptcy or finding a legitimate credit counselor to help you dig out. Neither one of these scenarios are pretty and should be the last, rather than the first thing you try.
If you’re determined to dig yourself out of the hole, try an supportive group like the one I wrote about on this site. The book is called One Paycheck at a Time, and there’s online support available at an additional cost, like $5 a week or something. Working your way out of debt is difficult and you’ll have to be determined, but I’m proof that it’s possible.
If you’re in pretty good shape except for an adjustable rate mortgage and some increasing credit card debt, then one last refinance might be the right move. I don’t really believe that you should use your home like a credit card, financing crap you didn’t need in the first place, but your home is one solid investment you can count on in a pinch. I think rates and values may change quickly in the near future, so this might be just the right time to get your financial picture in order.

Is your credit score too low to get credit?

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How to increase your FICO score so you can get credit