You’re not alone if you need to improve your credit report or credit score! The Credit Repair Kit for Dummies is a book that is desperately needed by many people in debt. The good news is that using credit cards can improve your credit rating and help you get out of debt.
These tips for managing credit card accounts – including how to improve your credit score – are from Ken Lin, CEO and Founder of Credit Karma.
“There are plenty of ways to get ahead,” says Paul Clitheroe. “The first is so basic I’m almost embarrassed to say it: spend less than you earn.”
Spending less than you earn is the key to achieving your financial goals. A second, closely related, tip for financial abundance is strategically managing your credit cards to improve your credit score, so you can be approved for mortgage and other loans. If you’re in debt or need help improving your credit, read Credit Repair Kit For Dummies.
And, here are Lin’s tips for repairing credit…
Two Things You Must Know About Credit Cards
1. Credit card balances that are reported to the credit bureaus don’t distinguish between revolving and paid-in-full balances. So even if you don’t carry a balance, you may still show credit card debt on your credit report. This is actually a good thing, because active credit accounts can repair your credit score. As a result, using all your credit cards once every couple of months for gas or groceries can improve your credit.
2. There isn’t one “official” credit score per person. The truth is that there are hundreds of different credit scores used by lenders, credit monitoring companies, and consumers. Consumers don’t need to worry about all of them so don’t pay for expensive services claiming to be the best. If it is a true credit score (i.e. one made from data from one of the three credit bureaus), you will be as good with one as you will with 100 since they are built the same way, with the same data.
3 Tips for Improving Your Credit Rating
1. Don’t let credit card debt ruin your financial goals. The average American has approximately $8,000 in credit card debt. Credit cards can be a slippery slope of spending beyond your means if you aren’t careful! If you just pay the monthly minimum, you’ll be in debt for years. The best way to improve your credit is to find a way to pay off your credit card debt, perhaps with a loan that has lower interest rates.
2. Watch your Credit Card Use (CCU). “CCU” is your total credit card debt / total available balance. If you are using more than 30% of your available credit in any month, you should consider increasing your limit, particularly if you are paying it off in full each month. Using lots of your available credit can be seen as a risk indicator and lower your credit score. To get rid of debt (or make sure you don’t go into debt in the first place!), pay off the credit cards with the highest interest rates first.
If you’re drowning in credit card debt, read 3 Ways to Cope When You Can’t Make Minimum Payments.
3. Remember that choosing the proper credit card can save thousands of dollars. Credit card fees and rates can vary drastically based on your credit and purchase behavior. For the same credit grade, interest rates can vary by more the 10% based on the card. That is a lot in interest fees if you consider the $8,000 average in balances that most consumers owe! Annual, balance transfer, and convenience check fees can add another $100 or 3% to your overall cost. So, don’t just accept the first credit card that comes in the mail. Instead, do your research; you’ll save yourself thousands of dollars.
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Laurie's "She Blossoms" Books
Growing Forward When You Can't Go Back offers hope, encouragement, and strength for women walking through loss. My Blossom Tips are fresh and practical - they stem from my own experiences with a schizophrenic mother, foster homes, a devastating family estrangement, and infertility.
How to Let Go of Someone You Love: Powerful Secrets (and Practical Tips!) for Healing Your Heart is filled with comforting and healthy breakup advice. The Blossom Tips will help you loosen unhealthy attachments to the past, seal your heart with peace, and move forward with joy.
When You Miss Him Like Crazy: 25 Lessons to Move You From Broken to Blossoming After a Breakup will help you refocus your life, re-create yourself, and start living fully again! Your spirit will rise and you'll blossom into who you were created to be.
Ken Lin is the CEO and Founder of Credit Karma.