ADULTING // IMPROVE YOUR CREDIT SCORE

IMPROVE YOUR CREDIT SCORE

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Thanks for much for being here! For my blog and channel, I want to share ways to help navigate adulthood and share my success or failures on certain topics. In this post, I wanted to share with you factors that affect your credit score, including which ones are more important, and ways to boost your score over time. I have a pretty high credit score for my age and want you to learn from what I am doing right so you can set yourself up for a great financial future. I wanted to list everything so you can refer back to this when you need to. If you find this helpful, subscribe to my new YouTube channel below and share this video!

https://www.youtube.com/watch?v=71IPLfwwizM

SIX FACTORS THAT AFFECT YOUR CREDIT SCORE

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1. late payments (40%)

Since this is the most important factor, I would recommend that you set everything on automatic so you don't have to worry about missing a payment. If you only put things on cards you can afford this should not be a problem. You should only be spending money you have and know you can pay back in full.

2. OLDEST ACCOUNT (21%)

Keep your oldest card and keep a recurring payment on there to keep it active. Set the payments on automatic so you don't think about it. You can put your phone bill or gym membership on there. Do not close your account because this shortens your history. If you got your oldest card ten years ago and close it or they close it on you because it is not being used, your history will shorten and you can't get that back.

3. CREDIT USAGE (20%)

Spread your usage between cards and stay under 30% utilization rate. The lower the better. If you have one card that has a $1,000 limit, only spend $300 on there each month. Open new cards to be able to spread out the utilization rate. When you are constantly reaching the limit of your cards, it looks like you don't have money. Use your cards with the highest limit for larger purchases to avoid maxing out on your other cards with lower limits. If you see that your usage is higher than 30%, I recommend applying for a higher limit but only if you are using your cards responsibly and to their fullest potential.

4. BALANCES (11%)

I recommend paying in full each month to not run a balance. If you run a balance, you are paying a lot more for what you originally purchased and you could potentially be paying hundreds or thousands more over time in interest. Stop spending money on stupid things.

5. INQUIRIES (5%)

Hard and soft pulls affect your credit if you have too many in a short period of time. Hard pulls affect your score more. They occur when you are opening a new credit card from a bank, looking to secure a mortgage or car loan. Soft pulls are credit cards from stores with a lower credit limit or landlords trying to see if you are a trustworthy person financially. Soft pulls only see what you would see when you look at your score. Try to avoid third party companies that check your score. I check mine through my credit card lender and it does not affect my score. If you are looking to buy a car or house, make sure you do it at a time when you know your score would be fine if it took a temporary hit.

6. AVAILABLE CREDIT (3%)

Have more than one card and have them work in your favor. Your available credit is all of your credit card limits added together. The higher the limit, the lower your utilization rate would be. If you have a high credit limit, this does not mean you can blow all of your money. It is there if you need it, but do not get carried away. Pay in full each month and put as much as you can in cards so you can take advantage of the cash back credit cards offer. Shop around, read the fine print and see which one works best for you.

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MOST IMPORTANT TIPS

1. DON'T SPEND MONEY YOU DON'T HAVE

2. STOP SPENDING MONEY ON STUPID STUFF

3. PAY FULL EACH MONTH

4. DO NOT COSIGN FOR ANYONE!

5. HAVE MULTIPLE CARDS THAT BENEFIT YOU

6. MONITOR YOUR SCORE THROUGH YOUR BANK IF IT'S FREE AND DOESN'T AFFECT YOUR CREDIT (AVOID THIRD PARTIES)

7. MONITOR YOUR STATEMENTS EACH MONTH

8. PAY YOUR CREDIT CARDS OFF BEFORE STUDENT LOANS AND COMPARE THE INTEREST RATES TO SEE WHICH ONES SHOULD BE A PRIORITY

FINESSE CREDIT CARDS, DON'T LET THEM FINESSE YOU

MY recommendation for your first card:

DISCOVER IT CARD

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BENEFITS

1. NO ANNUAL FEE

2. CASH BACK CATEGORIES THAT CHANGE EVERY THREE MONTHS WITH POTENTIAL TO EARN $75 BACK EACH QUARTER

3. YOU CAN USE THE CASH BACK WHEN YOU PAY WITH PAYPAL

4. CUTE CARD DESIGNS

5. GREAT CUSTOMER SERVICE BASED IN THE U.S.

Become a Discover Cardmember and get a $50 Statement Credit when you make your first purchase within three months. Then, earn rewards with every purchase after that.

APPLY USING THIS LINK BUT ONLY IF IT IS YOUR FIRST CARD AND YOU CAN SHOW YOU HAVE AN INCOME OR IF YOU KNOW YOUR CREDIT SCORE IS GOOD:

https://refer.discover.com/s/rr5jsk