A good credit score isn’t just for bragging rights.  It translates into real dollars saved by receiving preferential interest rates on everything from credit cards to auto loans, mortgages and even the cost of your auto insurance!  Building a good credit score takes some time and patience, and here are three important things to know: 

   1. Payment history: 

This is the single biggest factor impacting your score, so it MUST be an absolute priority in your life to make on-time payments for all your bills and loans.  Here’s an easy tip:  set your credit card account to automatically transfer the minimum payment due each month a few days ahead of the due date, (and then still login and pay the balance due each month of course).  By setting the minimum payment to always pay automatically, you’ll avoid accidental late charges and dings to your credit score. Automate every possible monthly payment you can. I have a credit score well over 800 and I attribute a lot of it to this trick. I’m literally NEVER late.    

   2. Credit utilization ratio:

This is the amount of your outstanding credit card balances divided by your total credit limits.  Aim to keep this ratio below 30%, which shows you’re a responsible borrower and helps your credit score.  A bonus of paying off your card's balance in full each month is that it BOTH helps you avoid ridiculous interest charges AND it also helps maintain a low credit utilization ratio.  And then, BINGO, before you know it, you have a higher credit score.   

   3. Length of credit history:

Interestingly, you might think it’s good to close out credit cards you’re not using but it can actually hurt your credit score.  Not only does it hurt your Credit Utilization Ratio in point #2 (because you just made your total available credit limit lower), but by maintaining open zero-balance accounts, especially older ones, you build a positive track record and BINGO, you have a higher credit score.  So, rule of thumb is don't close unused accounts unless they have high annual fees.

Additional tips:

• Check your credit reports regularly for errors and dispute any inaccuracies. Free annual reports are available directly from each major credit bureau at annualcreditreport.com.

• Consider credit builder loans or secured credit cards specifically designed to help improve your credit score. 

Remember, building good credit takes time and consistency. Be patient, stick to these healthy habits, and before you know it, you’ll see your credit score rise and your interest costs fall.    

Here are some helpful resources for further information:

• Consumer Financial Protection Bureau
• Equifax: learn more about credit builder loans.

“Life presents many choices, the choices we make determine our future.” -- Catherine Pulsifer

Wishing you wealth and success,

Yvonne 😊

_{This information is for educational purposes only.  Advice is general in nature and does not take into account your personal situation.  Consult your own financial, tax or legal advisors before taking any specific action.}