You guys loveloveLOVED last month’s post on money tips from millionaires, so I wanted to kick it up a notch by bringing it down more on the level of us everyday folks. 😉 We might not all be millionaires (yet), but we can all strive to have the best possible credit score. ICYMI, we talked all about credit here – from what it is, to why you need it, to how to try and improve it as you go. I also mentioned how J + I have an ongoing friendly competition to see who can earn the highest credit score. 😉 In good faith that you did your homework already there and know the what + why from that first post, I’ll try to not be redundant – let’s jump to the HOW by sorting through some known habits of people with good credit scores.
First thing’s first, a truth bomb: It takes longer than 21 days to form a habit. Habits can be just as hard to break as they are to make, so we’ve gotta aim high and set sights on the sky to land on the best possible credit score we can.
Second thing’s second, my friends at Lexington Law are leaders in credit repair and put together this *stellar* list of 15 credit facts to know – and it’s worth the read. Now, some habits of people with good credit scores…
- Pay off balances regularly (and on time). The speedier you pay off your balance, the more trustworthy you seem to the folks lending you credit in the first place. This ends up being beneficial across the board, from getting credit limit increases (which, if anything, helps the ratio mentioned below!) to ensuring you don’t end up with any unexpected late fees (boo). Even a single negative on your credit card could cost you over 100 points. So set an alarm on your phone + a date on the calendar and make it happen!
- Reconcile finances in general. If you follow along with my daily Schedule on Instastories, maybe you’ve seen me mentioning spending solid time reconciling lately…that’s because I fell waaaaaay too behind in my own business (BAD, I KNOW) and had some catching up to do STAT. I mean HEY – accounting was never my favorite subject! 😉 But it’s OH SO important. Life can get so busy for us all, so what I’ve found to help the most personally is literally adding it to your schedule. J + I will have reconciliation dates at the kitchen table together to work our Excel sheets accordingly (romantic, I know 😉 ).
- Keep your balance low (remember your utilization ratio!). We talked about your credit usage ratio here if ya need a refresher, but the gist: keep that outstanding balance number as low as humanly possible. If you’re following point numero uno here, that shouldn’t be an issue. But the other incentive to make regular payments comes in that ratio, since the lower your utilization, the higher your credit score.
- Live within your means. Millionaires do it, too! Maybe it seems obvious to you, but too many folks end up “housepoor” – that is, splurging on a house that they THINK they can “afford,” forgetting to also budget for, well, the rest of life. And if all of your paychecks are going to only one or two bills every month, it can make for a pretty miserable life in between – especially with something like a 30 year mortgage! Living below your means encourages not OVERspending, which allows for an easier route to all of the above points, too.
- Diversify your credit. Because credit isn’t just for credit cards! People with good credit scores likely have multiple streams of credit – personal loans, a mortgage, etc in addition to any credit cards. They say millionaires have at least 7 streams of income on average, so it makes sense that folks with good credit have a diversified portfolio of credit, too. If you want/need some ideas to diversify + build your credit without adding more credit cards, Lexington Law has some recommendations here!
- Monitor accounts and dispute any errors. Monitoring your accounts + transaction reports is important, first, because it’s likely where you’ll catch wind of a potential hack. If someone stole your credit card info, it’s best to remedy that situation ASAP before it becomes a fullblown catastrophe – so keep an eye out so that you can make the appropriate calls if/when need be to prevent disaster. Also, here’s the difference between your credit score and your credit report – the more you know!
- Get help when you need it (and before it’s too late). My friends at Lexington Law are the leaders in credit repair, so thankfully, they’re competent and know what to do. Whether you need to enlist their guidance in understanding your credit score, or more advanced help to try and remedy + repair your credit altogether, you can hire Lexington Law’s services and get back on the right path.
- Check in for lower interest rates. This could be the game-changing difference…and majorly money-saving, especially in the long term. J + I recently did some refinancing, which should means THOUSANDS of dollars saved in the same period of time. If you’re unsure where to begin here, Lexington Law also offers totally free credit consultations – worth the call if you’re serious about getting into the best possible shape.
Do you know folks with good credit scores and what works for them?
I hope this was a helpful guide to good credit scores 101 – let’s raise ’em up for you! Let me know if you try any of the tips aboe and how it impacts your own score. Would lovelovelove to know!
*Thanks to Lexington Law, a brand I lovelovelove, for sponsoring this post. As always, all opinions + thoughts presented are entirely my own. Thank YOU for supporting the brands that support Coming Up Roses!