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Will My 595 Credit Score Sink My Plan to Buy My College-Age Son a Boat?

Dear Penny: Need Some Money Advice? Ask Penny!
Kristy Gaunt / The Penny Hoarder
Dear Penny,

I’m a divorcee who had recent health problems that kept me off work, resulting in late payments. I’m now healthy and back to work in a great job with a decent income.

My son needs a bass boat in order to compete in college. I can make the monthly payment, and I have a down payment saved, but not the required credit score to purchase a luxury item. I have a pitiful 595 credit score.

What can I do to raise my score to 650 by January 2019? Is there anything? Is it even possible?

B.

Dear B.,

You can definitely increase your score quickly. The majority of your credit score is determined by two factors that you can take simple steps to improve.

The first is payment history, the biggest factor that goes into calculating your score. Paying your bills consistently each month — even if you’re just paying the minimum — helps you build a solid track record. And because payment history is the biggest component of your score, this is where you’ll see an increase the fastest.

The second most important component is your credit utilization: how much of your available credit you’re using right now. As you pay down your balances, you’ll see your score rise. But if you have a lengthy debt payoff plan, it’s going to take longer to see the increase.

You may not get your score to 650 by January, but if you make consistent, on-time payments you’re likely to see a substantial increase. Here at The Penny Hoarder, we’ve featured people who have raised their credit score by more than 100 points in six months; meanwhile, others have spent seven years repairing their credit, working from a 480 score to 764.

Focus on prompt payments for now and build back those good habits.

Can we talk about this boat, though?

I’m not sure if helping your son buy a boat is a wise use of your recovering financial reserves.

What would he do if you were still ill and out of work? How would he pay for the boat without your help?

Talk through this situation with him and determine the true reality of the situation. I would hate for you to make progress in building your credit back up, only to damage it later if something goes wrong with a boat loan.

I understand that the past few years have been rough and you want to help your kid do well in school. But this boat is not likely to help you in your efforts to stay above water.

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Disclaimer: Chosen questions and featured answers will appear in The Penny Hoarder’s “Dear Penny” column. I won’t be able to answer every single letter (I can only type so fast!). We reserve the right to edit and publish your questions. Don’t worry — your identity will remain anonymous. I don’t have a psychology, accounting, finance or legal degree, so my advice is for informational purposes only. I do, however, promise to give you honest advice based on my own insights and real-life experiences.

Lisa Rowan is a senior writer at The Penny Hoarder.

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