Advertising
Advertising

5 Tips for Rebuilding Your Credit Scores After Your 20s

5 Tips for Rebuilding Your Credit Scores After Your 20s

If you’re anything like me, your early 20s were not your most financially sound years. With a low-paying job, rent and bills to pay, and plenty of shiny gadgets tempting you at every turn, credit cards often seem to magically make it all work… until they don’t anymore.

Sadly, once you get your act together and want to start making adult purchases such as cars and houses, those foolish financial missteps can come back to haunt you. Thankfully, there are many ways to help repair your credit scores, which in turn will allow you to secure better financing on those large, milestone purchases your more mature mind is now focused on. Here are 5 suggestions to help you get there.

1. Consider Debt Consolidation

Not to be confused with debt forgiveness or bankruptcy, debt consolidation simply refers to the idea of moving all of your outstanding debts to one place in an effort to make paying them off easier. There are a few reasons why this could be a good idea, not the least of which is the path to financial freedom it provides you. Additionally, depending on how you choose to consolidate, it could serve to boost your credit scores.

Advertising

The two most popular forms of debt consolidation are personal loans and balance transfers, both have their pros and cons. First, personal loans can be good for boosting your credit scores because they will move your debt from revolving lines of credit to installments. That’s significant because your maxed out credit cards will carry more weight than installment loans when it comes to your credit utilization ratio. Since credit utilization/available credit makes up 30% of your FICO scores, paying off your credit cards with a loan should give you boost.

Sound good? Well, there are a couple of snags you should know about. As you’re undoubtedly aware, banks aren’t really in the business of lending you money for free. Because of this, you’ll want to ensure that the interest rate and APR (annual percentage rate) you’re offered on a loan doesn’t exceed what you’re paying on your credit card(s). On top of that, many lenders will charge what’s called an origination fee—a percentage of your loan amount that you pay to the lender and don’t get back. For these reasons, it’s a good idea to do the math or use a personal loan calculator when exploring your options.

Another form of debt consolidation is a balance transfer. Typically this is done by opening a new credit card with a 0% introductory rate and then transferring the debts from your other cards to your new one. Although this might save you a good amount of money in interest if you’re able to pay down the entire debt quickly, it could end up hurting even worse if you let that introductory offer end. Additionally, be aware that most cards charge you a balance transfer fee – as high as 5% of the amount you are transferring. Lastly, opening a new card will actually ding your credit temporarily since it’s a new credit inquiry, but the added credit availability will help you down the road.

Advertising

2. Keep Your Cards Open

Regardless of what method of debt consolidation you use (or don’t use, for that matter), you may be surprised to learn that closing your paid off cards is actually a terrible idea. Sure, it might feel good to call up your credit card company and tell them where to go, but closing your account can hurt your credit scores big time.

Part of the reason for this goes back to the idea of credit utilization. If you close your accounts, you’ll have far less available credit, which is a disadvantage in the eyes of FICO. Plus, a lesser (but still important) factor affecting your scores is your length of credit history. Unfortunately, when you close an account, the time you held that card no longer gets added into this average. It’s a much better idea to leave your cards open and just use them responsibly.

3. Try A Secured Credit Card

Didn’t get the “don’t close your cards” memo until it was too late? If you’ve really tanked your credit, it may be difficult to get approved for a new credit card at first. Even more frustrating, without a credit card, rebuilding your scores can be tricky. That’s where secured credit cards come in.

Advertising

What makes secured cards different from the ones you’re familiar with is that they require a deposit. The size of that deposit will depend on the card issuer and the credit limit you’re seeking, but it’s typically a few hundred dollars. Since you’re giving the card issuer collateral, these cards are far easier to obtain than unsecured ones, making them a good choice for those who are nearly out of options.

4. Pay Your Bills On Time

This may seem obvious, but it’s a huge help. Although any overdue payments you’ve made in the past will stick to your credit report for seven years (much like swallowed gum), putting those behind you and establishing a clean streak will serve you well. Additionally, while you will still see those errant payments on your report, their damage to your scores will diminish with time, so don’t fret too much.

5. Monitor Your Credit

Even if you abide by all of these tips in hopes of repairing your credit scores, how will you know if any of your efforts are paying off if you don’t bother to check? Thanks to modern technology, keeping up with your credit scores is now easier than ever, and often free.

Advertising

One place you should start is AnnualCreditReport.com, which provides you with your Equifax, Experian, and Transunion credit reports free once a year. The bummer here is that, in order to actually view your scores, you’ll have to pay. However, reviewing your report is extremely important because you may catch errors that are dragging your scores down unfairly.

As far as your scores are concerned, some credit cards now provide you a FICO score on your statement or on their website. If not, you can also try sites like Credit Karma to get a rough idea of what your scores look like. I say “rough idea” because Credit Karma utilizes the Vantage model for calculating credit scores as opposed to the more common FICO model. Because of this, you may see discrepancies, but at least you’ll be in the ballpark.

Yes, it’s true: adulting is hard. Alas, many of us make some major financial mistakes in our 20s that affect us as we attempt to be real adults a decade or so later. The good news is that, even if you’ve trashed your credit scores in the past, they do change and can recover. By paying off your debts, looking for secured forms of credit, paying on time, and keeping an eye on your credit, it will only be a matter of time before those dark fiscal days are finally behind you.

Featured photo credit: Pymnts.com via pymnts.com

More by this author

Earning Easy Money on Your Extra Funds Is Borrowing From Your 401(k) a Smart Move? Five Quick Money Tips for the New Year 4 Apps Worth Downloading Just for the Bonus Perks 4 Better Things To Do on Black Friday Than Shop

Trending in Money

1 25 Killer Sites For Free Online Education 2 How to Develop a Millionaire Mindset in 6 Simple Steps 3 5 Books You Must Read if You Want to Be a Millionaire in Your 20’s 4 20 Better Money Habits to Help You Increase Your Savings 5 50 Businesses You Can Start In Your Spare Time

Read Next

Advertising
Advertising
Advertising

Last Updated on July 4, 2019

25 Killer Sites For Free Online Education

25 Killer Sites For Free Online Education

Whether you’re five or ninety five, the internet has a lot to offer. Particularly when the topic is education, the resources on the internet are endless.

Best of all, many high quality sites are completely free. From history to coding, excellent free online education awaits on the following 25 sites.

1. Coursera

Untitled copy

    Coursera is a website that partners with universities and organizations around the world. This brings a wide variety of topics and perspectives to one searchable database.

    Coursera is a powerful tool for free online education, and includes courses from many top universities, museums and trusts. This gives the site an extremely wide range of in-depth courses.

    Coursera is extremely useful if you’re looking to study many different topics, or want courses from different schools and groups.

    2. Khan Academy

    Untitled 2 copy

      Partnering with many post secondary schools, Khan Academy offers a useable, well organized interface. Also curating many courses from around the web, Khan Academy offers impressive depth on many different subjects.

      Among the more well known educational sites, Khan Academy is also incredibly useable, which may make it easier to keep learning goals.

      3. Open Culture Online Courses

      Untitled111 copy

        If you are struggling to find exactly the material you are looking for, try Open Culture’s listing of free online education courses. The page highlights 1000 lectures, videos and podcasts from universities around the world. The site features a lot of material found only on universities private sites, all in easy to browse categories. This means you can find hundreds of university courses, without having to visit and search each university’s own site.

        Open Culture’s list features courses from England, Australia, Wales and many state universities around the United States. A very helpful resource for finding many courses in one area of study.

        4. Udemy 

        Untitled 4 copy

          Udemy’s free courses are similar in concept to Coursera’s but additionally allows users to build custom courses from lessons.

          Working with many top professors and schools, the site mixes the customizable platform of other sites with a heavy emphasis on top quality content. This is another site however, that mixes free and paid content.

          Advertising

          5. Academic Earth

          Untitled 5 copy

            Another site with courses from many different schools is Academic Earth. Much like the three sites above, Academic Earth brings together top notch courses from many different sources, and focuses on offering a wide variety of subjects.

            Academic Earth lists courses by subject and school, so it might be easier to find what you’re looking for.

            6. edX

            Untitled 6 copy

              Another great option for free online education is edX. Also bringing together courses from many different schools, the site has impressive, quality information for everyone. edX covers a great range of topics.

              7. Alison

              Untitled 7 copy

                Unlike the previous sites on this lists, Alison is a free education site offering certification in some areas. Alison offers courses mainly in business, technology, and health, but also includes language learning courses.

                It’s a great option if users need certification for their learning as Alison also offers school curriculum courses.

                8. iTunesU Free Courses

                Untitled 8 copy

                  A very convenient place for free online education is iTunesU, because it integrates seamlessly with your iPod, or any app-ready Apple mobile device. On iPad, iPhone, or iPod touch, users download the iTunesU app.

                  Desktop users can access  iTunesU on the upper right hand corner of the iTunes Store. iTunesU is also convenient because the store is categorized much like iTunes.

                  Users can search learning materials in many different ways, including genre and topic. However, courses are often a mix of free podcasts or videos, and paid content.

                  ITunesU does include courses on a pretty wide scope of topics, but does not integrate with Android, Google or Windows mobile devices.

                  9. Stanford Online

                  Untitled 9 copy

                    Your hub for all the online offerings from Stanford University, Stanford Online offers self-paced and session based courses. While Coursera features some courses from Stanford, many classes are only available via other hosts. Some courses require iTunes, but most are completed in your web browser.

                    Advertising

                    Stanford Online is a great site for high quality courses, though the topics are somewhat limited compared to sites partnered with more than one school.

                    10. Harvard Extension

                    Untitled 10 copy

                      Like Stanford Online, Harvard Extension features free online education courses from Harvard only. This is another excellent source for top notch course material, though the course variety is less rich than multi-school sites.

                      Additionally, Harvard Extension allows you to search for courses by professional certificate. This makes it much easier if your online education goal includes certification.

                      11. Open Yale Courses

                      Untitled 11 copy

                        Open Yale Courses echoes Harvard Extension and Stanford Online, in that it offers only courses from Yale. While the site is similarly limited to topics taught at the school, Open Yale Courses offers a lot of videos of actual campus lectures. The availability of videos makes the site a great option if you’re looking for quality courses, but learn better by watching than by reading.

                        12. UC Berkeley Class Central

                        Untitled 12 copy

                          Much like the other schools on this list, UC Berkeley has a variety of free online education options. The school has slightly fewer courses than the schools above, but includes some supplementary lectures, webcasts and RSS Feeds, making it easy to keep up with the topics you choose.

                          13. MIT OpenCourseWare

                          Untitled 13 copy

                            Similarly, MIT offers a variety of free courses. The school has a comparable number of courses to the schools above, plus includes very in-depth course materials on the subjects available. MIT also offers free RSS feeds, a convenient way to continue learning.

                            14. Carnegie Mellon Open Learning Initiative

                            Untitled 14 copy

                              Carnegie Mellon’s free online education site is comparable with the other school’s on this list, however, Open Learning Initiative also covers a smaller range of topics. But for the topics that are covered impressive, in-depth material is available.

                              15. Codecademy

                              Untitled 15 copy

                                Codecademy is a website dedicated specifically to teaching coding. Where other coding sites follow an example/practice session workflow, Codecademy includes a live practice window. This means you can practice coding while still viewing the lesson material.

                                The courses at Codecademy are well written and easy to follow and the website is organized very nicely. Codecademy features a centralized dashboard where you can monitor your progress, plus organizes lessons into complete modules. This lets you learn an entire language without needing to pick the next course manually.

                                Advertising

                                16. Code

                                Untitled 16 copy

                                  Code is another website focused on coding and app writing. A site with high quality courses, Code also features learning options for kids.

                                  In addition to kid friendly courses, Code offers free online education classes on a wide variety of technology topics. These classes include app writing, robotics and Javascript.

                                  Most of the courses are also geared in a such a way that they can be useful in a classroom setting. This makes Code a great resource for harder to find coding topics, as well as various learning settings.

                                  17. University of London Podcasts

                                  Untitled 17 copy

                                    The podcast page on the University of London website is another great source for free education. While the courses are limited to podcasts, the site features podcasts from it’s own campus, as well as eleven universities in and around London. This gives learners a wide base of topics and lectures, but still ensures in-depth material.

                                    18. University of Oxford Podcasts

                                    Untitled 18 copy

                                      Similar to the University of London, the University of Oxford features many different podcasts. Most are public lecture series or lectures from visiting professors, with several different recordings available.

                                      The advantage to this particular site is that podcasts are organized into series, making it easy to subscribe to multiple lectures on one topic. Another good site for thoroughly in-depth lectures.

                                      19. BBC Podcasts

                                      Untitled 19 copy

                                        For the more casual learner, the BBC offers a wide variety of podcasts on many different topics. Most podcasts are updated weekly, and focus on everything from finance, to sports, to current events.

                                        Through the World Service line of podcasts, there are also many in different languages. The focus of these podcasts are less in-depth and theory based, which may be more accessible to the average person.

                                        20. TED-Ed

                                        Untitled 20 copy

                                          Another great destination for more general learning is TED-Ed. From the same people that brought you the all encompassing, motivational web series, comes a site chocked full of educational videos. Most include impressive animation, and all are ten minutes long or less.

                                          Not only is TED-Ed an excellent site for the curious, it also includes supplemental materials and quizzes on the videos. This makes the site extremely useful in formal education settings, as well as in entertaining ways to brush up on new discoveries and topics.

                                          Advertising

                                          21. LessonPaths

                                          Untitled 21 copy

                                            LessonPaths is another great tool for those looking for a more usable and convenient way to access learning material. On this site, users create link playlists of their favorite learning materials from other sites. Users then rank these collections, making it easy to find many different high quality, accessible sources on a given topic.

                                            22. Memrise

                                            Untitled 22 copy

                                              Another impressive free online education site offering ease of use and convenience is Memrise. Available both on desktop and as an app, Memrise is a particularly powerful tool if you are studying a language. The site encompasses many other topics as well, though some of the course material is user generated content.

                                              Part of what makes Memrise special is their integration of games into the learning materials, mixing learning with entertainment.

                                              23. National Geographic Kids

                                              Untitled 23 copy

                                                The kids site for National Geographic is another site that makes free online education applicable for younger users. For those looking for kid friendly education, a large variety of games, puzzles, videos and photos keeps kids interested on this site.

                                                National Geographic Kids doesn’t organize learning into courses, making materials available by topic and medium instead. This makes National Geographic Kids a good option for those looking for a more casual learning environment.

                                                24. Fun Brain

                                                Untitled 24 copy

                                                  Fun Brain is another good option for kids who want to learn online, but focuses on games and fun puzzles. Particularly focused on math and reading, Fun Brain’s game based approach can be valuable if the child in question struggles to pay attention.

                                                  Fun Brain offers rewards and challenges as well, and is another site aimed at a casual learning experience for kids K-8.

                                                  25. Whyville

                                                  Untitled 25 copy 2

                                                    Similar to the sites for kids free online education is Whyville a destination for preteen online learning. The site includes a variety of social features, with a focus on learning materials geared for young teens.

                                                    Whyville also mixes in educational games, to make the site a well rounded option for kids too old for simple games, but too young for heavy reading based material.

                                                    More About Online Learning

                                                    Featured photo credit: Dai KE via unsplash.com

                                                    Read Next