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Improve Your Credit Scores


Why do you care?

Bottom Line: Your credit score impacts the amount of money left in your pocket at the end of the day.. and more! Find out how? 

Living in the pattern of watching and improving your credit score is a wise financial decision. It is an active process. It can improve your overall financial wellness! Your three credit scores are the cornerstones of your financial maturity. 

Fix It Time! Your scores reflect your worthiness, lowering your interest, increasing your buying power, increasing your disposable income - Improve the Your Quality of Life.  Responsibly watch for errors and remove them.  Fix Errors. Start new healthy financial behaviors. The increase from fixing true errors will happen relatively fast, but the rest -- time to work. Slow, planned, scheduled, disciplined behavior skills that benefits a lifetime and spread into all areas of life. 

Set your goal, get your calendar, and schedule. I use an electronic calendar that sends a reminder. This blends a few skills set: Setting goals, making reasonable, realistic plans, and scheduling. 

QUIZ - WHICH IS BETTER? $6000 worth of perfect credit limits with $1000 charged OR $30000 credit with 15000 used? 

SCHEDULE

Obtain your first report of all three and your credit scores. If you used a company that offers the comparison and scores and decide to keep the monitoring service (this is $360 a year and very expense on average). You can self-monitor FREE. 

Schedule with a reminder to email you to order your credit reports once a year free. If you order them on line, disputing is pretty easy.  

Schedule ALL your payments 35% of score is made of your payment history (always with a email or text reminder). One day is  as damaging as thirty days. Thirty-one is as damaging as sixty.

BEHAVIORS

Re-establish responsibly. Things to keep in mind.

  • Keep your word. You agreed to pay on time. Pay on time. 
  • Never had credit? Open a, yes A, line of credit. One. A personal loan, a credit union shared loan, a  secured credit card utilizing a maximum of thirty percent of the card. 
  • New credit lowers the average account age. This may make you look risky. Rule of Thumb: only open accounts you need. The lower the average account age - the lower the score. 
  • If you go to collection, and it is reported accurately, it will show on your report.  The collection account can stay on the report for seven years. Gradually, it will heal. It will take time.
  • If you miss a scheduled payment, the quicker you return to paying on time, the sooner you will start rebuilding that debt. Gradually, it will heal. It will take time.
  • Keep ratios good. If you must use credit cards such as an emergency or zero percent interest purchase that will not end up late (which means you will have to pay the full interest).  If you have a 5000 credit limit, consider keeping the amount use under $1250 but no more than $3500.  Set your goal range and watch it. If you are too high, set your goal to lower the amount gradually and make a commitment to keep it under thirty percent use. 
  • If something is incorrect on your credit report - notify the credit reporting agency through a documented, supported dispute. Keep the records!

Thinking and Behaviors to Avoid

Avoid making inquiries unless it is for a beneficial purpose (that does not include 25% off the first purchase deals). 

Avoid obtaining new credit for discounts or to try to increase your debt ratio - remember new accounts impact your average account age. Some experts say a blend of credit is good. Others say it really does not improve the credit score. 

Avoid closing unused credit cards in an attempt to raise your scores. This could hurt you! 

Avoid minimizing - "It's only 1 day late." One day is one day and it is late. You did not keep your word. If you are going to be late, communicate with the ones you made the commitment to pay. See what arrangements can be made. Ask directly how can you keep it off the credit report. 

Beware of Misleading, Overcharging, or Flat out Fraudulent "Credit Repair" Companies. There are a lot of scams. I took a course advertised online. Many are using his method to "get rich monitoring credit while only working five minutes a month." Most have little or no experience and their goal is to find errors and remove them. Again ask the benefit. The low fee for this is $60  a month - that is $720 a year. Consider: What are you receiving for this huge annual expense? 

QUIZ - WHICH IS BETTER? $6000 worth of perfect credit limits with $1000 charged OR $30000 credit with 15000 used? ANSWER: 6000/1000