Have you ever wondered what happens when your bank account is starting to dwindle? Could your credit card debt be driving you deeper into the hole? It is time to start thinking!
We live in a world where credit is everywhere. Banks and lenders approve us for loans based on our credit score. But it’s not just your financial health they are assessing; it’s your overall creditworthiness and even how smart or trustworthy you are based on the hard data collected by the algorithms and trends of your personal information. So, getting approved can be the difference between winning or losing when you receive that new job offer or investment opportunity.
Getting approved for new credit can feel like an accomplishment worth celebrating, which is why so many of us end up helping ourselves to a line of credit with no intention of paying it back immediately. However, right after you have approved for a new line of credit, it might be in your best interest to use caution while adding more debt. The reason you should use caution is that FICO® Scores sometimes take a temporary hit immediately after you have approved for a new credit line
— and the more lines of credit you apply for at once, the more significant the drop will likely be.
If this is something you are looking to avoid, it might be a good time to focus on gardening your credit.
What Is Credit Gardening?
Going gardening is a part of the process of rebuilding and maintaining your credit. Gardening your credit means that you are refraining from applying for new credit or taking any actions that might result in a hard inquiry. The goal here is to avoid falling into the trap of multiple new accounts opening simultaneously, as these could be detrimental to your score. Do not apply for new credit and keep an eye on your reports and scores.
Gardening could also mean different things to different people. For newcomers, it is the very first step into the world of credit repair. For those with established credit, it is a way to take your knowledge of current credit products and use them to build a new foundation for your credit.
Why should you garden your credit?
Here are the top five reasons why most people consider gardening:
- To help strengthen individual credit profiles so they may apply for certain financial products
- To remove negative items from their report, which can bring down your FICO Scores over
- Gardeners don’t want to be bound to one creditor for a long
- It’s a small step on the journey from no credit to good
- The process can improve their current credit behavior by making timely payments and having multiple credit lines open at once for an extended period.
How can you garden your credit?
If you have ever had a maxed-out credit card, you know what it’s like to be a gardener. The garden boasts some lovely green vegetation, but the weeds are certainly thriving too. It’s time to do some weeding, tilling, and removing debris from the garden of credit.
There are three steps in this process:
- Remove all negative accounts from your credit
- Change the status of all accounts to “paid as agreed” or “paid charged off”.
- then rebuild your credit with a new
The cards that you want to plant to achieve your goals are quality, prime credit accounts with low-zero annual fees, decent interest rates, and no monthly fees what-so-ever.
What is tending your garden?
No matter how big the gardens we build in our lives or how organized the pathways may be, every gardener should tend to their garden. To keep your credit healthy, you need to:
- Keep a good record of your creditors, who they are, and to those you owe money.
- Ensure your credit is in good standing by paying your bills on time and keeping it below a certain
- Update your information with the credit agencies when you move or get married or go independent; you may also have open lines of credit that need to be closed/updated as well as active accounts.
What else should you be know?
- Even if you can have all the gardening knowledge but do not put in the effort, your garden won’t
- To prevent legal problems and protect yourself, always have a healthy garden. Credit gardening is the basics of keeping your credit
- Just as a healthy plant requires the right nutrients and soil, credit health stems from a close relationship between banks and lenders. If you allow yourself to be taken advantage of, your credit will get
- Credit score gardening, just like real gardening, requires a plan. Without a plan, you can easily make mistakes or overlook something