Let's Taco 'Bout Credit: A Guide to Personal Credit Fitness
Just as you might crave variety in your taco fillings, having a diverse credit mix can significantly benefit your personal credit score. Today, we're going to taco 'bout it!
Understanding Credit: Before we dive in, it's crucial to understand that your credit score is a number that represents your creditworthiness. It plays a crucial role in determining whether you're eligible for loans, what interest rates you'll get, and even factors into non-financial things like rental applications. Maintaining good personal credit can open doors to business opportunities, too.
Free Credit Score Monitoring: One of the first steps to working on your personal credit is knowing where you stand. Thankfully, there are many free options to help you with this. For instance, Discover Card provides a free service to monitor your score at Discover Free Credit Score. This gave me a more accurate idea of my credit standing and where I needed to improve. You can also check your credit report annually for free at AnnualCreditReport.com.
Building Credit with Self, Inc.: Another helpful resource is Self, Inc. They offer programs where you can make payments towards a CD account held at Lead Bank for one or two years. This money can later be transferred to a secured credit card, providing you with positive credit history that reports to the credit bureaus almost immediately. You can get started here.
Bank Options and Secured Cards: For those working on creating a good mixture of creditworthiness, or establishing new credit, always check with your bank to see what secured card options or programs they may offer. Many cards also offer credit monitoring as an included feature, but remember, your score can vary across different systems.
My Personal Experience with DiscoverIt Secured Card: When I started a DiscoverIt Secured card, I also noticed an increase in personal credit, and they eventually returned my deposit when they switched me over to an unsecured card. Discover Secured Card. All of these steps have personally helped me raise my score by more than 150 points and obtain additional lines of credit.
Becoming Financially Fit: As you embark on your journey to financial fitness, remember the following: maintain a disciplined budget, keep your total credit utilization between 10-30%, pay EVERYTHING on time, and be patient. Both personal and business finances require careful management. Most companies want to know that when you're extended credit, you'll pay it back. As a rule, don't charge/spend money that you can't afford to pay off within the same month, if possible.
One Final Note: As you start establishing a healthier relationship with money and credit, don’t start applying for every credit opportunity that comes your way! Having too many inquiries and hard pulls on your credit can hurt your score. Be very methodical and intentional on where and when you ask for credit.
Remember, this isn't a sprint, it's a marathon. Becoming financially fit takes time, patience, and discipline. But with these tips, you're on your way to a healthier financial future. Let's get financially fit, together!
Disclaimer: The information provided in this blog post is for informational purposes only. It should not be considered financial or legal advice. Always consult with a financial advisor or a legal professional to receive accurate information for your situation. This is not a sponsored post.