I wanted to drop a Credit Score Knowledge Bomb in your lap today to help you get some quick wins. I talk a lot about building wealth and investing but those things take time and patience and doing. And patience has been on my mind a lot. You’re a go-getter and do-er and “waiting” isn’t your strong suit which is also why you’re so successful. That drive serves you in so many ways but building wealth isn’t a sprint. I hear you when you’re frustrated that you can’t achieve all of your money goals right now. I wanted to give you some wins you take in the meantime while you’re building your empire.
Let’s talk credit score. You want to have good credit because it affects how you can borrow money and a good or “prime” credit is considered to be anything above a 720. So check out these 3 quick credit wins you can get today!
#1 - Pay your bills on time and pay more than the minimums when you can, hopefully you’re not in a situation where you need to prioritize your debt repayments but if you are definitely prioritize your mortgage or utility bills, things that are necessary for you to live.
#2 – Having little to no debt on your credit report isn’t necessarily a good thing. Since the 3 credit bureaus don’t know what your income looks like and what you have in savings, they are only judging you based on what kind of debt you’re carrying. So I want to share two different types of debts that you can have.
Installment loans is debt that has defined terms, meaning your monthly payment is fixed and there’s a defined end date. An example of this would be an auto-loan, student loan, mortgage. Revolving debt is just that revolving. Your monthly payment changes and it’s continual. There’s no defined end date. An example of this would be a credit card. The credit bureaus like to see you’re able to manage different kinds of debt. So if you have a combination of installment and revolving debt that you pay on time, your credit score will increase and at least be maintained if it’s already high.
#3- Last thing I want to share with you is that your credit score goes down if your credit card balance is 50% or more of your credit card limit. So if your credit card limit is $10k and your balance is $5,000, even if you pay that on time, your score is going down each month. Again the credit bureaus don’t know how much you have in savings, they can only see what you have reporting on your credit. So in this example, your credit card balanced should be $4,000 or less to maintain or build a good credit score.
So while you’re on your way to hitting your money goals, do the little things to give you some wins for today! Happy Saving!