This is a post by Anna Hicks.
It's a catch-22: to take on an unpaid internship, you often have to go into debt or rack up money on your credit cards. However, if you don't manage your credit properly, you could prevent yourself from turning that internship into a full-time job. It can be a real dilemma -- employers first ask interns to work for free, then formally check their money management skills before hiring them on as full-time employees.
So, what are your options for credit improvement?
1. Pay your bills on time. From this day forward, do not send another late payment. Your payment history makes up 35% of your credit score. Creditors report lateness to the credit bureaus after 30 days, and this information stays on your credit report for up to seven years. This will reduce your credit score and make it harder for you to get certain jobs.
To avoid late payments, pay your bills as soon as they arrive. Set up automatic payments with your bank or creditors to avoid a late arrival, and if you experience economic hardship, notify your creditor and ask for a due date extension.
2. Use credit repair services. If your credit report isn’t accurate and the problem is too big to handle yourself, get help from a professional. Many people have successfully improved their credit scores or corrected inaccurate credit history info by working with a service. However, it's important that you do the research. Reading a Lexington Law review from a satisfied customer can put your mind at ease and help you decide whether credit repair can work for you. Additionally, conduct online searches and check with the BBB for complaints against particular companies.
3. Transfer Your Balance. Moving your balance from a high interest rate card to a lower one is a smart way to save money and reduce debt. Growing interest can significantly prolong the amount of time it takes to pay off your cards.
The key to finding success with balance transfer credit cards is to commit yourself to paying off your debt in the "no interest" window, and to make your monthly payments on time. Try to avoid using your new card to buy something because the "no interest rate" rule may not apply to these purchases. Also remember that when you transfer the amount, you’ll most probably be charged a balance transfer fee. Read the fine print and make your decision accordingly.
4. Commit to Making Two Minimum Payments Every Month. Since your credit card company charges you interest daily, the quicker you are in making your payment, the faster your card’s average balance will come down. This means that you'll end up paying less interest. So if you are strapped and on a tight budget, why not make two minimum monthly payments instead of one? Once you pay your minimum due for the month, why not go ahead and make the same payment again after 1-2 weeks?
Your aim here is to focus on paying your minimum due amount twice every month until you have your debt wiped off. By making an additional payment each month, you will become debt-free in a shorter period of time. In order to keep track of your payments, make sure you put a reminder or alert in your calendar.
It's your credit, and it’s your responsibility to protect it. Regardless of the mistakes you’ve made in the past, bad credit doesn’t have to haunt you forever -- nor does it have to affect your ability to turn an internship into a job!