Cash rules everything around me. It’s more than a dope Wu Tang lyric. I’ve found that it’s true. Banks use your credit score to determine how well (or poorly) you use that cash to rule your domain.
I’ve been trying to determine what’s the best way to boost your credit score and show the banks that I’ve been a good ruler (or at least working on being a better ruler). In my research, I found some unorthodox ways that can be used to raise my credit score.
Why do I need to boost my credit score?
First, a little bit about what a credit score is. Investopedia.com defines a credit score as “a number between 300-850 that depicts a consumer’s creditworthiness.”
The score is based on your credit history, which measures how many open credit accounts you have and how well you’ve managed them. Did you use your credit a lot? Did you pay back the balance? Did you miss a payment or two? Is your credit account closed? Have you filed for bankruptcy or had a repossession? All of those things in your credit history impact your credit score.
Credit scores affect insurance rates, loan interest rates, employment, and other important financial products. A higher score can lead to a brighter financial future. Now you see why cash rules EVERYTHING?
Your score can either be excellent (800-850), very good (740-799), good (670-739), fair (580-669), or poor (579 or lower). If your score is around fair or poor, you’re probably wondering what’s the best way to that score? Well, consider using one of these unorthodox ways to give your credit score a boost.
1. Piggyback on good credit histories.
Growing up, I’ve always heard of this method to boost someone’s credit score. It was often the punchline of a joke. I remember watching one of Tyler Perry’s plays when elderly matriarch Madea confessed that she used her younger daughter’s name to get loans, credit cards, cars, etc.
The crazy thing is that this method can be used… but legally. I would highly recommend that you don’t do it like Madea. Besides, she carried a gun and allegedly killed her husband.
You can use a family member’s or friend’s history to help you ONLY if their account is in good standing. Many credit card companies will allow you to add a family member or a distant relative to your account. You will be the authorized user on the account and you can pay bills, etc.
This method can help you both get a bump in credit. But, be warned…. If you allow bad habits to take hold, you can not only further hurt your score, but you can also hurt your friend or family member’s score.
2. Set up auto-payments.
Did you know that the most common fee that credit cardholder get charged with the most is the late payment fee? According to CreditCards.com, late fees can get as high as $39 per missed payment. That’s an extra $39 ON TOP OFF your monthly payment. So, if you had a $25 monthly payment that you missed, you could be looking at $64 for your next payment. How could you pay $64 if you couldn’t pay the $25 in the first place?
There is one way to save money and prevent you from missing another payment. This is where automatic payments come in. Automatic payments are the bees knees (I don’t know who came up with that catch phrase, but I’ll allow it)! Also, with you making payments on time automatically, it can look good in your credit history, thus improving your credit score.
3. Avoid pre-approved offers (also, hard pulls & multiple lines of credit).
You’ve seen these in your mailbox before. You probably have one in your mailbox now. They are sometimes dressed up to look like a lottery ticket or something like that and it says some nonsense like “YOU HAVE BEEN PRE-APPROVED.”
I hate those things, and so should you.
When you take advantage of a pre-approved offer, the company will perform a credit check. You have to be careful when it comes to getting your credit checked frequently. When you get your credit checked too much, it can lower your credit score, especially if it’s a “hard pull” on your credit.
Hard pulls are normally done when you’re applying for a credit card or a loan and can stay in your credit history for up to 2 years. Also, if you’re lucky enough to successfully get that new credit card or loan, do you really think you can manage it properly?
It’ll be much easier on you to manage fewer accounts than to add additional ones. That way, you can prevent multiple mistakes which can hurt your credit even more.
4. Keep old accounts open.
So, what. You’ve maxed out your credit card. Don’t close the account! Just pay it off.
If you close the account, than it can lower your credit score. So, prove to these companies that you’re more responsible with your money than they think you are.
Besides, credit is like fine wine – the more it ages, the better it is. Old accounts retain your payment history and shows your ability to maintain the account. Also, it increases the overall amount of your credit, thus boosting your credit score.
5. Pay your library fines.
I told you that this was an unorthodox list of ways to improve your credit score.
Non of us are perfect. We’ve forgotten to return a library book before and have incurred a late fee. Did you know that libraries can send unpaid fines to a collection agency? If it goes to a collection agency, count that as a mark against your credit score.
At the time of this article, my library has actually waived late fees (both past and present) because of the coronavirus pandemic, which has come in handy. But, I still try to return my books to the library in a timely manner.
Don’t let a copy of “The Glass Hotel” go between you and a new car, even if your library is waving late fees now. Just do the right thing and return your book.
Bonus Method: Do it yourself!
All the methods listed above can, in some way or another, help improve your credit score and maximize your chances to taking care of business. But, there are many more things that can impact your credit score that can be easily fixed.
Did you know that credit card companies can make mistakes on your credit report? They may overcharge you for something. You might have something in your credit history that doesn’t belong.
Did you know that these mistakes may keep your score low, despite your sincerest efforts of using the 5 methods above?
I know of a tool that can be used to improve your credit score while helping you to pay off debt and increase your paycheck without asking for a raise at work.
The myCredit system is a complete financial literacy program that can help you rule over cash, which does rule everything around you. The system includes the 750 Credit Plan which empowers you to repair and reestablish your credit with step-by-step videos showing you how to do it yourself.
The system also includes the Income Shifting strategy guide. This guide helps you fix the most common mistake people make on the W-4 that costs them hundreds of dollars every year. You’ll also learn how to reduce and eliminate your debt while maximizing your income without asking for a raise or searching for a new job.
The great thing about this system is that a one-time payment gives you lifetime access to all the videos and tools. You can learn and repair your credit all within your own time. You can learn more about it through my link, which goes to help support this blog to help you achieve the American Dream in your sleep.