Fintech Tools for Repairing & Rebuilding Your Credit

Credit is a critical part of modern life. Unless you’re willing to wholeheartedly embrace an off-grid lifestyle, you absolutely must integrate the use of credit into your financial transactions.

This can be challenging if your past circumstances have left you with a low credit score. Fortunately, even if your credit is currently in shambles, there are many ways that you can use technology, in particular, to help you resurrect your score and restore a sense of health to your finances.

Here are a few of the top ways that fintech tools can help you repair and rebuild your credit.

Make the Best of Your Current Credit

The first thing that you want to do is use technology to analyze the current state of your credit. You can do this by:

  • Going online to order free copies of your credit report from the three credit bureaus.
  • Review the reports and dispute any obvious errors that may be affecting your credit.
  • Increasing your available credit by opening up a new credit card online or asking for an increase in your credit limit via email or chat — do not use this additional credit, as having unused-but-available credit can lower your credit utilization rate and, by extension, your credit score.

Schedule Reminders and Use Autopay

Once you’ve addressed your current credit situation, it’s time to use fintech to begin the long-term process of rebuilding your credit. One of the simplest yet most effective ways to do this is by perfecting your payment history. You can do this in one of two ways:

App software concept

  • Use a simple scheduling app or even Google Calendar to create reminders to pay your bills on time. A good payment history is the number one thing that can increase your credit score.
  • Set up autopay whenever possible. This can help you make non-revolving debt payments — things like your mortgage or student or auto loans — on time and in full.

Use Budgeting Apps

Mobile finance has been growing in popularity, and no wonder, too. Mobile banking and financial applications offer convenient tools to help manage your finances. You can deposit checks, shift money around to cover bills, and most importantly, maintain an airtight budget.

By creating a solid budget that considers your income and expenses, you can maintain a crucial level of control over things like spending, savings, and debt. A budgeting app enables you to remain impressively aware of how much you’ve spent each month. It can help you stop adding to your debt and even free up money to save up for an emergency fund or extra debt payments.

Creating a budget

As a goal, use your budgeting app to try to keep your revolving debt (that is, your debt that isn’t predictable, like a mortgage) at or below 30% of your total available credit. In other words, if you have $10,000 available on your credit cards, don’t use more than $3,000 in any given month without budgeting how you’ll pay it off.

Maintain a Growth Mindset

Despite its importance in handling your finances, only 33% of consumers use fintech at the moment. However, this number will almost certainly increase over time for various reasons. The pandemic is pushing everyone into online and cloud-based interactions at a rapacious rate. Additionally, industries like blockchain are making financial interactions via fintech much safer.

With that in mind, it’s important for you, as a user of financial technology, to remain willing to learn and grow along with the fintech sector. Much like a business, you must foster adaptability and a willingness to change how you use fintech as the tools available change, evolve, and become more effective.

Improving Credit with Fintech

Repairing and rebuilding credit requires thoughtfulness, strategy, and awareness. Fortunately, fintech can help with all three of these things.

Fintech can enable thoughtfulness through things like budgeting apps. It can enhance strategy by allowing you to review credit scores and schedule things like auto payments. It can even create an increased sense of awareness via mobile apps and payment reminders. So lean on the fintech tools available and begin healing your credit so that you can financially survive and thrive in this credit-happy world.

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