7 Tips to Making Your Credit Great Again for the New Year
The New Year is always prefaced with us excitedly mapping out how we’re going to be better, bigger, stronger than the previous year. Our credit is no exception.
If Soaring Your Credit Scores is one of your primary goals this year, I want to help!
Here are my top 7 Tips to Soaring Your Credit Scores!
1) Grab A Copy of Your Credit Report from All 3 Credit Bureaus
You can’t fix what you don’t know! I have had hundreds of people tell me they know they have bad credit without even reviewing their credit reports. In most cases it’s, “I haven’t used my credit in a while, therefore my scores are low” vs. “I have bad credit”. Find out exactly where you stand and what needs to be done to Soar Your Scores.
You can grab a free copy of your credit reports each year at annualcreditreport.com. Because you want to have 100% factual, up-to-date information, I would avoid Credit Karma initially; they only give you 2 credit bureaus and the information isn’t always accurate. You need your information to be on point. My recommendations are: Identity IQ, FreeScore360, & MyFICO.com
P.S. If you are a bit lost on how to read your credit reports, I have a free 5-day video challenge that walks you through it: Credit Report Mastery. We’ll spend 5 days together reviewing each section of your credit report, where you’ll learn how to read, understand, pinpoint errors, and the first steps to take to repair your credit.
2) Pay Ahead of Your Due Date
Late payments tank credit scores. The number one reason I hear why consumers are late paying a bill is because they forgot.
With payment history making up to 35% of our scores, it’s imperative to pay all of our financial obligations on time, every time. A good habit to put into place is to schedule payments around the time the billing statement is cut, versus on the due date.
Then, set reminders on your digital, mobile or physical calendar for the bills to pay for each pay period. This why, you are paying each bill according to your pay schedule, and ensuring that each one is paid prior to the due date.
3) Keep Credit Card Balances Low
Your credit card utilization accounts for up to 30% of your credit scores. Make a strategic plan to get from under your credit card debt as quickly as possible – especially the ones with high interest rates. Bringing down credit card balances is by far the fastest way to increase your credit scores in 30 days or less. Make a plan to bring credit card balances down and to keep it down. The ideal percentage is below 10% of your approved credit limit, and up to 20% of your approved credit limit MAX.
You want to eventually get to the point where if you can’t pay it off when the statement comes, don’t charge it.
4) Stop Applying for Credit!
If you are not actively rebuilding your credit, then please stop applying for new credit that you don’t need!
With each new account added to your credit report, you are reducing the age of your credit, which accounts for up to 15% of your credit scores.
Not to mention that inquiries and the appearance of a new account on your credit report can reduce your credit scores!
If you don’t need it, don’t apply for it!
5) Some Cards Should Go
I know there’s a lot of advice not to close your credit cards. I beg to differ. I’ve spoken to so many of you with a Credit One card on one side of your wallet and an Amex on the other side. Really? There is no way a subprime card should be in your wallet once you are at the prime level, credit score-wise. So YES, close out your subprime credit card accounts, once you have a decent amount of prime cards in your wallet.
But, I’ll lose all the history on that account if I close it! No you won’t.
FICO will continue to count a closed credit card’s history as long as it’s reporting on your credit report. Closed credit cards remain on your credit report for 10 years after the date of closure.
Subprime cards come with high interest rates and fees, and should only be kept until you have improved your credit enough to qualify for better forms of credit. Once that happens, drop them with the quickness. (Consider utilization when you are closing credit cards. I leave more information here).
6) Negotiate better credit card rates
If you have been a good paying customer, and your credit scores are on point (or are improving) call your credit card providers every 6 months and negotiate three things:
- Lower interest rates
- Waive or eliminate annual fees
- Increase credit limits
Per a CreditCards.com survey, over 82% of consumers hear a ‘yes’ when they call. We all know what they say about closed mouths, right? Go get ‘em 😊
7) Immediately Fix Errors on Your Credit Report, No Matter How Small
I left my 5-Day Credit Report Mastery Challenge to assist you in learning how to Read Your Credit Reports and Pinpoint Errors. But… What do you do when you find an error(s)?
Well, some are simple, such as name variations, or incorrect mailing addresses. Others are more detrimental. How can you tackle these items on your credit reports?
- You can learn how to Do It Yourself! This does require a learning curve, to ensure you’re taking the right steps, but it certainly is doable. I specialize in teaching consumers, just like you, how to Fire Up their Credit Scores inside of my Credit on Fire Academy. I literally give you everything you need on how to Repair & Rebuild your credit scores! Learn more here.
- Hire A Reputable Company to do it for you! A reputable company will develop a personalized strategy, tailored to your credit needs and goals, to Soar Your Credit Scores. You’ll know what actions to take on your own, what credit products to acquire, how to pay those products, and what debts to eliminate, while they actively work to dispute items on your credit report on your behalf.My firm is a BOSS in this industry. If you’re looking to hire a firm to go to work on your behalf, visit soarmyscores.com to get started 😊
Hope you enjoyed these tips! If you have more to add to the list, feel free to post them below 😊. If you’re looking to vibe with a community of FICO Building, Debt Slaying individuals, come on into my Free Online Community; Credit Makes $ense; we’d love to have you!