Written by: Rekkai Steed
What do I know about increasing your credit? Well, quite a bit actually. The saying is, “If you knew better, you would do better”. However, that is not always the case. Sometimes you do know better but can not force yourself to do better. Circumstances. I get it. It - being life, happens to us all. It is just a matter of how you respond to it. At any rate, here are a few tips to help improve your credit score in the near future.
Review Your Credit - It is hard to know how and where to start to repair your credit if you don’t even know what is on it. That credit card you got when you first hit the University yard when you were 18? Still on your credit. You assumed it was taken off your credit report, however you know what they say about people who assume. Be proactive and get in front of whatever could be preventing you from attaining the score you need to purchase the things you want. Try CreditKarma.com and freecreditreport.com among other websites to pick up your credit report.
Pay Your Bills On Time - I know that in the world of personal finance, sometimes you need to call
the power company or water company and request that extension. However, the place where not paying your bills on time can really affect you are in your credit cards and any other accounts that directly affect your credit such as car payments and department store accounts. There are SEVERAL tools at your fingertips through the generosity of the internet to help smooth this process out for you. Try Mint, Acorns or Truebill for a few options to help you budget your expenses and your income.
Balance Your Credit - Credit bureaus like Experian, Equifax and Transunion like to see nicely balanced portfolios when it comes to your credit. Things like Consumer Credit, Mortgages, car loans and student loans make a quality mix. One area where most people make a mistake is by having too many consumer credit accounts (such as credit cards, store lines of credit and store credit cards) open at one time. Close any accounts that are not being used but be careful to leave enough open so that your accounts are balanced.
Minimize Hard Inquiries - Applying for credit should be calculated. You should NOT apply for
every offer that is thrown at you because every offer is not made the same. Some offers, with extremely high interest rates and/or monthly fees may not be the best route for you to go as you try to improve your situation. Every time you apply for a new credit card, it leaves a hard inquiry on your account. This can hurt you. If you can, consult with a credit professional.
Improve Your Debt Ratio - You should aim to use your available credit as little as possible. The goal should be to stay under thirty percent. This means that for every $100 available to you, you should try to stay under $30 actually used. If you can stay under 30%, this will do wonders for your FICO score.
Consider A Different Approach When Paying Off Credit Cards - In order to increase your score to the maximum level, when it comes to credit cards, pay all of them down first to a really low level. Then in a month or so following that, pay it off. You never want to pay it off all at one time without letting the card work for you in your favor because it is more favorable for you to appear to have payments that are on time and paying more than the minimum amount.
Ask for Credit Limit Increases - By doing this, you can improve your utilization ratio. An increased limit will decrease the amount you have spent in relation to the total amount available. However, many people make the mistake of increasing their limits and then increasing their spending. This can only hurt you. Make wise decisions if you are committed to improving your score in a relatively short amount of time.
Hopefully, you find these tips useful and a good jumping off point for you to begin increasing your score. Yes. It IS hard. And it takes sacrifice. But it is not impossible. I think of it in much the same way as tithing. God demands we give Him 10% of our FIRST fruits. Yet many of us struggle with that (myself included). But the only reason we struggle is because we are given the choice. And to abide requires obedience and diligence. Another humanly trait many of us
struggle with. God also requires a cheerful giver and too many of us will lament giving God our last (even though it is supposed to be our first) and then believe that it is a quid pro quo service. "If I give God this, then He will give me this. Paying my tithes requires God to answer whatever prayers I have and everything will go my way." It DOES NOT work like that. Taking care of your credit is a personal choice that is hard and requires sacrifice. Many do not want to take a step back financially in order to take three steps forward fiscally. We struggle with what we must do versus what we want to do. However, I am a firm believer in tithing, prayer and faith. There are many other things I should do as a man, but that is where I begin. Everything I do is for the glory of God. Start there and then branch out into what you should do to take care of yourself so that you can take care of others. And repairing, rehabbing or increasing your credit should be high on your list.
By: Rekkai Steed
Comments