7 Tips to Improve your Credit Score

The American Dream is built on the ideals of home ownership, Entrepreneurial ventures and buying a status symbol car. Most people’s first experience with credit is financing their education and navigating student loans.  How soon the loan matures, the rate of interest, and the approval amount will all depend on your FICO Credit Score.  People with scores of 700 and higher are the beneficiaries of lower interest rates and almost instant approvals. A score of  700 or greater vs. a score of 698 will have to pay interest that is higher on average by one-half percentage points. And, this means over a year a person with a lower score will pay $19,000 and more as interest on a loan of say $65,000.

A credit score takes into consideration: payment history, current earnings, current debt, length of credit history, types of credit utilized, and your new credit. If two or more members of your family are earning then apply for a loan jointly.

You can take a few simple steps and ensure that your credit score is higher than 700.

• Maintain a long healthy credit history. Keep alive your oldest credit card and be sure to pay all bills on time. Never keep bills pending over a 30 day period. If in a crunch at least pay the minimum charges due. 

• Utilization is 20%-30% of your credit score.  Do not have too many credit cards. Learn to say “NO,” to offers of free credit cards. And, maintain a good credit limit. Avoid using all the available credit on the cards

• Ensure that the credit report you have is accurate and that there are no errors clerical or otherwise.

• Plan your finances.  A budget is non negotiable.  If you find yourself spending more than you make it’s time to talk about debt consolidation.

• Never suddenly close or open accounts. This leads to suspicion that you are trying to manipulate your credit report.

• If you are having problems speak to your creditors well in advance and work out a structured repayment plan. Request the creditor to refrain from reporting the late payment.  Communication is key!

• Late or delayed payments drive your score down so always pay bills on time. Keep a tab on due dates and ensure that all bills are paid by setting up email or task calendar reminders.

Learn all you can about how to read and interpret your credit report by reading my  Understanding Your Credit E-Book and scores.  Keep my recommendations and basic criteria in mind while managing your finances. Maintain the debt-to-credit limit ratio and, if need be take the help of a finance planner.  I offer Free initial consultations and you can book a consultation online by clicking here.   A useful source to learn about managing credit is: Millennium Budget Consultings Econ:101 Blog. I  provide in depth coverage on money management, debt management, and credit report reviews and free industry tips.

Even if advised refrain from filing for bankruptcy. All you need to do is to sit down and curtail expenses, plan your income-expenditure , and avoid spending what you have not earned.  For some, talking about Money is taboo, but it’s time that we break up with debt and halt our generational curse of overspending and materialism.  Are you ready?

As a bonus, I’m going to give you access to my course Talking to Creditors originally priced at $9.99.  Send me an email to credit@millenniumbudget.com and I’ll get access for free!  Let’s keep this ball rolling!

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