5 Steps to Improve Your Credit

Rebuilding credit can seem like a daunting task, but with a few adjustments to life and a careful eye on your habits, you can rebuild your credit. 

1. Review your credit report

Reviewing your credit report is the first step. Look for any discrepancies and if you find one, commit to clearing it up immediately. You can get a free credit report on AnnualCreditReport.com weekly through the end of December 2023.

2. Be timely

Make timely payments if  you have existing credit card debt or loans. This contributes to 35% of your FICO score.  If you don’t have credit, obtain a secured credit card. (see below)

3. Keep credit usage low

Keep your credit card usage as low as possible. The key is to stay below 30%, but ideally the closer to 0% the better. This makes up 30% of your FICO score.

4. Be proactive

• Ask to be an authorized user of someone you trust and has a  responsible financial history.
• Ask the credit companies to increase your credit limit.
• Sign up for Self Inc. – this company allows you to open a savings account for a sign up fee and monthly interest, but will report timely, monthly payments  to all credit bureaus and, at the end of your term, you have access to your savings.
• Self-report your rent.  Experian RentBureau is free but only reports to Experian. There are others which report to Equifax and Transunion but  come with a fee. You will have to reach out to your landlord as it’s their responsibility to report.
• Use Experian Boost to self-report your utilities,  internet, phone. This is a free service.
• Open a secured cre dit card – you can start as low as $200. Most credit cards have this option.

5. Don’t close credit cards

The length of your credit history matters – 15% of FICO score. Don’t close any credit cards instead autopay a small purchase like Spotify and autopay the credit card monthly.

Mindful Reminder

Rebuilding your credit is not a quick fix. It takes diligence and patience. Use mindful tools to help you along the way.  Incorporating a daily walk, awareness of breath, or beginning a home meditation practice can all be helpful to ease the tension.  Review How to Create Mindfulness Around Our Finances. If you feel severe anxiety or depression, seeking the help of a mental health provider can be useful to process strong emotions.

Attend a Workshop

If you are interested in attending an live webinar on improving your relationship with your finances, please visit my events.

Related Posts

Improving Your Payment History	Understanding Your Credit Mix	Components of VantageScore 3.0 Model
Why Your Payment History Matters	What Makes Up Your FICO Score	Financial Planning