Tag Archives: credit score

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Credit Cards Are Not the Devil

If you recall I wrote a post way back when on how I was able to live life without using credit cards. It was actually pretty simple if I lived within my means and made sure I saved money for emergencies. I had gotten myself in big trouble by not being responsible with my credit card usage and I promised I would never do that again.

For a few years I swore off credit cards completely until I ran into one little problem. I’m lying because it wasn’t a little problem; it was a big problem because I wanted to buy a house.  The problem was I didn’t have any credit. When I stopped using credit cards, I closed the accounts when I paid off the balance so it was hurting my payment history. It was a safety net that I had put in place that hurt me in the long run. I had no car loan and nothing in my name, but my student loans. 15% of your credit score is the length of your credit history and 35% is your payment history. I would have done better by living the accounts open so I had some credit under my belt.

Fast forward I needed a new car and was able to get the loan in my name at a higher interest rate of course and with the on time payments, I was able to boost my credit score a little. Soon I started getting pre-approved offers for credit cards. Yeah how did they get my information anyway to know I might be able to qualify?

My mortgage counselor suggested I open up a credit card to help establish myself more so I did. I first opened up a Firestone card because I needed to have car repairs done and it was like a blessing since I couldn’t cover all the cost at the time, but I quickly paid that off. Trust me my past credit card experience still has my scared to death. I soon followed up with getting an American Express with a $1000 limit to use for gas and a Visa for any random purchases so I could collect reward points. The Visa card came in handy because I put my son’s school tuition on each month and paid the credit card. The cool part is I almost have enough points to get a tablet that I desperately need for my business.

So no credit cards are not the devil….my uncontrollable spending habits were the devil. I am not perfect, but I have learned so much from my mistakes throughout this financial journey of mine and I hope my experiences can help you as well. Although I now have credit cards, the cool part is I don’t actually need them. It is a choice of whether or not I use them. I can still hold true to what I said before and live my life without them if I prefer.

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Mommy Fix Your Credit

Mommy Fix Your Credit

Being pregnant with my little one opened my eyes to a lot of things. At 24 I was young, but not that young, and still figuring things out for myself. I had credit card debt from college, mounds of student loans and my credit score was embarrassing. At the time I’m pretty sure it was like 505 which is horrible. I knew it was going to be a long journey so I needed to start immediately getting my shit together, not just for me, but more importantly for him. His little voice was screaming, “Mommy fix your credit.”

Credit Score Ratings

Cash is king, but if you don’t have cash than you better have a good credit score. A poor credit score can make buying a house and other “adult purchases” so much harder. It has been a long journey, mainly because I needed to clear up a student loan that was in collections, but my dedication and stubbornness has finally paid off. My credit score has made a drastic improvement and continues to rise. At my recent mortgage appointment, my credit score was 697 which is considered good. I was shocked because for the longest time I was stuck at the 620-630 range. Settling that Sallie Mae loan really helped boost my credit score. Here are 5 tips to help you fix your credit:

1) Education is Key- Before you can fix your credit it’s important to know how it is calculated. See the chart below

What-Is-A-Credit-Score

2) Getting to the root of the evil- Pull your credit reports so you know what is on them. Everyone is entitled to one free report every 12 months by each credit bureau. Use these as your guideline to fix your credit. Sometimes there are false items on your report and you will want to work with the credit bureau to get these things removed. Go to www.annualcreditreport.com to pull your reports for free.

3) Stop ignoring your debt- Debt makes up 30% of your credit score. You cannot ignore this if you want to fix your credit. Gather all of your debt and devise a plan to eliminate it.

4) On time payments- Make a pledge to pay your bills on time. Scheduling online payments will help with this so you won’t forget. Create a budget to stay organized with your money if you need to.

5) Low Credit Card Balances- If you have been following me, you may recall my “Life Without Credit Cards” post so it is do able. If you have them, I highly suggest you not use your credit cards until you get the debt under control. Keeping your credit card balances 30% or less is best if you have to have them in your life. A lesson that I learned is to keep the accounts open and just avoid using the cards. The length of your credit history is about 15% of your credit score so the longer you have the account the better it looks.

So there you have it. Mommy fix your credit so you can stop making things hard for yourself. By no means will this be easy so you are going to have to be disciplined and remember why you are doing this. Feel free to reach out to me if you have questions.

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