Good Credit Habits Earn Results
June 17th, 2020
Recently when talking with two clients, one client had only one credit card, and the other client had two cards, but both had credit scores close to 800. How did they do this? Here are some of their tips:
- They setup Autopay for bills that are the same amount each month
- They also set-up Bill Pay through your credit union or bank, this allows them to send payments electronically each month for free
- They consistently use less than 30% of their credit card limit. If their credit card limit is $1,000 they spend less than $300 in any given month
By paying their credit card bill on time every month and making sure their credit utilization was below 30% they were able to earn a great score. Using an analogy, just like a letter grade for a class, don’t focus on the grade, instead learn something of value. Similarly, don’t focus on your credit score, focus on the habit. In life, this will provide you with more benefits.
As can be seen from the graph below, paying your bills on time represents 35% of your credit score, and your credit utilization is 30% of your credit score. These two items have the largest effect on achieving good credit.
Please contact me at Alex@SaveFirstFinancial.org if you are interested in scheduling an appointment with one of our coaches.
