How To Protect Your Credit Score When You Have An Irregular Income
It can be tough to protect your credit score when you have an irregular income. Your payment history is one of the biggest factors in your credit score, so if you’re not bringing in a consistent paycheck, it can be difficult to keep up with your bills and improve your credit score.
Fortunately, there are some things you can do to help protect your credit score even when your income is irregular. Here are a few tips:
1. Stay on top of your bills.
This may seem obvious, but it’s important to make sure you’re paying all of your bills on time, even if you can’t pay the full amount owed.
Late payments can have a big impact on your credit score, so it’s important to stay on top of your bills and make sure you’re making at least the minimum payment each month.
2. Try to maintain a consistent level of debt.
If you have a lot of debt, it can be hard to keep up with your payments and improve your credit score.
However, if you can try to keep your debt at a consistent level, it will help show creditors that you’re managing your debt well and may help improve your credit score over time.
3. Use credit cards wisely.
If you use credit cards, it’s important to use them responsibly. That means paying off your balance in full each month and not using more than 30% of your credit limit. Using credit cards wisely can help improve your credit score over time.
4. Keep an eye on your credit report.
You’re entitled to one free credit report per year from each of the three major credit bureaus.
It’s important to review your credit report regularly to make sure there are no errors that could be dragging down your score.
5. Consider a secured credit card.
If you have trouble getting approved for a traditional credit card, you may want to consider a secured credit card.
With a secured card, you put down a deposit that acts as collateral for the account. This can help you build or rebuild your credit history and improve your credit score over time.
How Irregular Income Can Impact Your Credit
If you have irregular income, it can impact your credit in a number of ways.
- First, if you have trouble making ends meet each month, you may be more likely to miss payments or default on loans. This can lead to late fees, higher interest rates, and negative marks on your credit report.
- Second, if you rely on credit cards to make up for shortfalls in your income, you may end up carrying a balance from month to month. This can quickly add up, and the interest charges can further strain your finances.
- Finally, if you are self-employed or work on a contract basis, your income may fluctuate from month to month. This can make it difficult to budget and plan for expenses. It can also make it difficult to qualify for loans or credit cards.
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