One of my goals is to achieve and maintain an 800+ credit score. I'm not there yet, but I will be one day. Since my semi-obsession with credit began, there are a few things I learned that I wanted to share. I'm no expert. I am still learning, and if you have tips, please share.
(1) Pay your bills on time! Late payments cause credit worthiness to plummet. (I once forgot to pay an in-store credit card, and I kid not, my score dropped over 30 points. Shout out to the customer service rep who helped me when I called boohooing about that absent-minded mistake. He's the real MVP.) A good payment history is a vital necessity!
(2) You can get a copy your credit report for free every 12 months from Equifax, Experian, and Transunion. When I was in high school, my uncle advised me to use one free report every quarter.
(3) Hard inquiries, when your report is pulled by a potential lender because you've applied for credit, can negatively impact your score. (They stay on your report for 2 years.)
(4) Credit utilization matters! (Even when you're paying your balance off every month) If the total limit of all your credit and retail cards is $10,000 , for example, and your credit and retail debt is $9,000, you have 90% credit utilization. (Yikes!) You want to keep it below 30%.
(5) When you cosign for a loan, it will report on and impact your credit. It's considered a joint account, and you are a borrower.
(6) Comb through your credit report. Are there any items on there from when you were a minor? Are there accounts you don't recognize? Dispute them!
(7) I started my credit journey with a credit starter loan when I was 18. The line of credit was low and the interest was high, but I paid them timely every month. They actually reported to the credit bureau. To date, that starter loan is still helping my credit by aging my credit history.
(8) Avoid collections! They hurt your credit and stay on your report for 7 years. If you have a collections, pay it off and keep the receipt. (You will need it.)
(9) Pay important, credit impacting items with methods that can be tracked. (I once had an apartment report a collections. I was able to resolve it quickly because I had documentation that I paid the fee via money order.)
(10) Sign up for a credit tracker. Credit Works by @experian is definitely my friend. I love it. It's affordable, and the app is easy to use and functional. If you have a credit card, it's likely that they may a free credit tracking service available to you. Inquire about it.
Sidenote:
When I become a mother, I plan on adding my teenage children as authorized users to my credit cards with the largest limits so reporting can began on their credit. (As I currently foresee it, they won't actually have access to cards.) If I had been mindful of this a long time ago, I would have done it for my younger brothers.
