Typically, when clients are even aware of this topic, they’ve already made mistakes that have established a bad credit history and may no longer be in touch with you or anyone else at your agency.
It’s one of the important aspects of long term economic self-sufficiency that often ‘falls between the cracks’ in the initial resettlement service period.
Here are five strategies you can share with clients:
1. Pay rent and utility bills in full and on time. Not doing so will put you on the fast track to a negative credit history.
2. Pay off your IOM Travel Loan All 9 Volags collect loan payments from the clients they resettle and report to TransUnion, one of the three major credit bureaus. Bet many of you didn’t know that, right?
3. Get a pre-paid credit card from your bank. Make sure they report payment history to a credit bureau. Not all of them do. Begin by opening a checking account, establishing a relationship with someone in your branch and managing your account wisely for 3-6 months.
4. Pay off a big ticket purchase (major appliance, used vehicle) with a vendor loan or layaway plan. Be sure you can pay it off on time and that they report payment history to a credit bureau.
5. Avoid amassing a large credit card debt. It’s much easier to obtain a credit card than to manage out of control debt and large payments. Losing control with soon put a blemish on your credit history.
(Thanks to my baby brother the banker and Terry Holthouse, LIRS Travel Loans Manager, for contributing their expertise to this post.)
Higher would love to hear from you with tips, resources and approaches to financial literacy.