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Published Jul 8, 2021

Tricks To Improve Your Credit Score

Explore effective strategies for improving your credit score with Marielle Segarra as she delves into credit management, the systemic biases in financial assessments, and the impact of understanding your credit's nuances on your financial empowerment.
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Episode Highlights

  • Utilization

    Understanding credit utilization is crucial for maintaining a healthy credit score. explains that credit utilization, which accounts for 30% of your credit score, is the ratio of your credit card balance to your credit limit. To maintain a good score, it's advised to keep your balance below 30% of your limit, and even lower if you aim to improve your score 1.

    30% is a new 100%. If you want to just maintain, like, my credit score is in the 800s, so I can hover around 30 and be good.

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    This means if your credit card limit is $100, you should aim to keep your balance below $30 to avoid being flagged by credit card companies as a risk 1.

       

    Payment Dates

    Managing payment and statement dates can significantly impact your credit score. advises paying off your balance before the statement date to prevent the credit bureaus from recording high utilization, which can harm your score 2. However, if you aim to boost your score, paying off the balance after the statement date but before the due date can be beneficial, as it demonstrates responsible credit usage 3.

    Paying off a debt in full every single month is like fairy dust on your credit score.

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    Understanding the difference between these dates is key to optimizing your credit score strategy 2.

       

    Score Boosting

    Boosting your credit score involves strategic actions and understanding the rules of the credit game. emphasizes that credit scores are not just about financial reliability but also about playing by the rules 4. Key strategies include focusing on your FICO score, which is the most commonly used by lenders, and ensuring you pay off your credit card in full each month 5.

    You actually don't have to be as disciplined with credit. You just have to know the rules of the game and play within them.

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    Additionally, maintaining a mix of credit types and keeping older credit accounts open can further enhance your score 5.

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