START IMPROVING YOUR CREDIT SCORE TODAY!
Let me know if you can relate to my short but true credit history story. If you’re like me, when you were younger you did not take having good credit seriously. You may have applied and gotten approved for various store credit cards or bank credit cards…Right? I know I sure did! I remember once, I turned 18 years old I applied for all the store charge cards that I frequently shopped in like Old Navy, The Limited, The Gap, Victoria Secret and so on… It made me feel awesome and empowered! I felt like someone was finally treating me like an adult because I had credit cards in my cute little pink wallet and mail came to the house with my name on it ?.
Now, again if you were like me…once you received those charge cards, you vowed to make the minimum monthly payments with scout’s honor ?. You charged items to those credit cards and tried your very best to make the minimum monthly payments. Then LIFE happened and somehow you fell behind and stopped making those payments. You probably also maxed out the credit cards as well. When this happened you really didn’t consider the long -term effects of late payments to your credit score. Nor did you take into consideration of the credit utilization rule (we will talk about the credit utilization rule more depth in another blog post.)
It’s okay if you didn’t consider the long-term effects those poor choices would have on your credit score. I had that mindset! I did not consider or care about the effect my choices would have on my credit score. Because I did not have an immediate need to use my credit. I thought, “Hey I’m not trying to buy a house or an expensive car right now. I’ll worry about my credit later.” This mindset happens to the best of us. I can admit that I didn’t know nor fully understand how credit worked, other uses for good credit or the rules to build and sustain good credit.
Building or sustaining GOOD credit is not something that I was taught here in the United States education system within the public sector. Nor was I taught money management or financial education as a student in primary, middle or secondary school within the public sector. My parents also lacked the knowledge of credit usage. I remember growing up in our home my parents worked, saved their money in a bank owned savings account and used cash for all their purchases. So, I received very little financial education on credit and money management in my home or in a classroom setting. I eventually sought out financial education. This education didn’t happen until I became a more mature adult who already made poor financial decisions and I was looking to improve my financial resources. I’m in no way blaming our public-school system because it serves its purpose and nothing is totally perfect. I’m also not placing blame on my parents because I know they did the best they could with the knowledge and resources they possessed.
I think a lot of us are suffering from the lack of credit and money management education. Do you know how we can eliminate the lack of financial and money management education? Well, I have one answer and that is being more proactive in attaining financial education so we can teach the younger generations the importance of good credit and money management. Educating ourselves early on will help to prevent the results of the negative impacts a not-so-good credit score will on your life. I’m not saying this will eradicate negative credit scores across America but it will help many people to understand the credit system and personal money management. I have taken courses regarding money management, read books on financial education and attended group seminar’s revolving around saving money and improving my credit score. Which leads to the 5 Ninja Tips on how You Can Start Improving Your Credit Score Today!
NINJA TIP #1
Review Your Credit Score
This is the easiest and most looked over tip. Simply review your credit score and see if there are any discrepancies. I would start by finding a free credit report online. Preferably one that doesn’t ask for credit card information to review your credit report. Review your credit report thoroughly to see if you notice any inaccurate information. If there are discrepancies on your credit report file a dispute immediately. You can file a dispute in two different ways. 1.) You can write a dispute letter to the creditor. Or 2.) You can file a dispute online to the credit bureaus. Once you file the dispute and if there is no response from the creditor within 45 days of your dispute then the credit bureau will be remove the discrepancy from the credit report. They will remove it because of the lack of information from the creditor. It’s as if someone is making a claim against you It will be time to celebrate when this happens because you will watch your credit score go UP!
NINJA TIP #2
Pay Off a Past Due Balance
Paying off a past due balance will add points to your credit score. IT does not matter whether the balance is large or small. Paying it off will look great on your credit report. Why will it look great on your credit report? Well here is why; the paid off account will be reported to the credit bureaus and increase your credit score. It’s just that easy! Pay off an old balance that’s just lingering on your credit report and voilà your credit score will go up in numbers like magic!
NINJA TIP #3
Make on Time Payments
I cannot stress this enough! Making on time payments to your creditors is a crucial tip. Be consistent and this will reward you the most out of all the tips listed here. If you consistently make on-time payments, this demonstrates to creditors that you not only pay your bills on-time but it builds a great rapport between yourself and the creditor. This rapport is important in building a harmonious relationship. You will reap good benefits from this relationship as in; Asking for an increase in your credit limit and it gets approved. Why does it get approved? Because they can review your account and see that you keep up with your payments and you’re a responsible consumer. It’s a win-win for both parties.
NINJA TIP #4
Don’t Apply For New Credit
Of course, credit cards are what we desire but having too many inquiries on our credit report can hurt us in the long run. Credit inquiries are “dings” on our credit report that come from when a creditor runs your application through the credit bureaus using your personal information. This “ding” as I affectionately call it will remain on your credit report for 2 years. I say do not apply for credit when you are repairing your credit score because this inquiry or “ding” on your credit report will subtract points from your credit score. Again, be very careful when applying for credit. The safety net that I personally use is to have no more than 2 “dings” on your credit report at any given time.
NINJA TIP #5
Keep Balances Low
The best practice and rule of thumb to adopt when having a credit card is to only charge items to your credit card that you can pay off on when your credit card bill is due. Simply put: Only charge things that you can pay off at the end of the month. This way you will not have a revolving balance that accrues pesky interest rates which causes you to end up paying more money back to the creditor in interest rate fees. Who wants to do that? Not I, so I try my best to not charge things I cannot pay back at the end of the month. On occasion, unforeseen circumstances do arrive and you must charge a substantial amount of money to your credit card without being able to pay it off. If this happens then remember to pay as much as you comfortably can towards your credit card. Keeping in mind-The Lower, The Better.
I want to give back and help people achieve their goals. I hope these 5 NINJA TIPS help someone on their journey to GOOD CREDIT! If you have questions you can contact me via email: Brittney@RedDoorRealtySolutionsLLC.com