**This video is a flashback for sure!**
Hello Sohpisticated Spenders!
Credit is always a tricky subject.
Good for you is that I’ve already been thru the good, the bad and the ugly when it comes to credit.
Here are a few tips that I’ve picked up along the way!
Check out the 7 best ways to clean up your credit:
1. Know where you stand! The first step I took waaaay back in the day when I was cleaning up my credit was to first know where I stood. Credit.com is a good site where you can get a quick look at your credit without affecting your score. I also recommend getting your free credit report from AnnualCreditReport.com. They are the only people who truly give you a free credit report. The others all sign you up for a free trial for credit monitoring and then you pay a monthly fee forcredit monitoring. But this is a good deal if you would like to get credit monitoring. I know I’ve had many purses lost and stolen. And it is a good idea to have yourcredit monitored after these events happen.
Annualcreditreport.com redirects you to the 3 credit reporting bureaus and you order your reports from them. I check one from each bureau every 4 months. You can also pay extra for your FICO score if you wish. **update**CreditKarma.com is an excellent site for tracking and monitoring your credit for free (And I am not getting paid to say that!)
2. Priortize who you would like to pay off. Student loans should be #1 on your list because those can not be discharged in a bankruptcy and they can also take away any tax refund you would receive. Next, I would knock off any small balances and build my way up to the bigger ones. I know some people suggest going for paying off the debt with the higher interest rate. But people get more of an instant gratitude when knocking things off a list.
3. Pay all of your bills on time! 35% of your credit score is based on your payment history. Just take things one day at a time. Pay attention to those due dates or even set them all up for auto-pay for at least the minimum payment. And if you want to pay more, you can just go in at any time to make extra payments. Paying your bills on time will help to raise your score by the biggest amount.
4. Reduce your balances. 30% of your score is based on your outstanding debt. Try to use only 30% of your available credit on each card that you have. This may be a factor you use when you are deciding on how to prioritize who you will pay.
5. Be selective when applying for cards. 10% of your score is based on new credit and that can be a bad thing. Hard inquiries hurt your score. Try to shop around for a mortgage or car at the same time. So that the hard inquiries are close together and there is a valid reason for all of the recent inquiries. And be careful with signing up with dept store cards and every new credit card offer that comes your way. Use discretion.
6. Diversify! 10% of your score is based on your credit mix. Revolving credit, a mortgage, installment loans all give you good experience in building a good score.
7. Be patient! 15% of your score is based on the length of your credit history. Fine wine ages over time, so time will be on your side.
Check out this article (click here) from how stuff works for more information about your credit score.
And in my next post I will discuss why good credit is so important.
Any other tips?????