Improving Your Credit Score

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Have you ever tried to figure out how the credit score system works? It’s pretty complex.

Today I want to share 3 simple tips for helping you increase or improve your credit score.

But first, let me ask you a question. The question is, how do you as a 401k or 403b participant become a 401k superhero to your future self?

That is the question, and these videos will give you the answers. Hey, I’m Jonathon Schultheiss and welcome to the Becoming a 401k Superhero videos.

In my book Focused, The Financial Freedom Formula, I teach a simple 7 step process for helping you create financial freedom.

Step 4 is improving your credit score and here are three tips I give folks about how to do that.

Tip number 1:

You must make sure that you pay your bills on time and no more than 30 days late. I know it sounds simple right. But late payments will drag your credit score down more than anything.

Tip number 2:

Dispute inaccurate items on you credit report. I tell a story in the book about closing a bank account that didn’t get closed and I didn’t get all of my bank drafts stopped. That took my account negative and gave me a charge off on my credit report.

It almost kept me from buying a house. I had to dispute it and get it removed from my account. What a pain!

You can pull a free credit report or sign up for a free service like Credit Karma to see if you have anything on your credit worth disputing.

Tip number 3:

Keep your debt utilization rate low. First, let’s talk about what debt utilization is. It is the total available amount of debt you have, then the percentage of that, you use each month.

For instance, if I had only 2 credit cards and they had a $5,000 limit on each, I would have $10,000 worth of available debt. If I were using $5,000 of it, then I would have a 50% debt utilization rate.

The higher your debt utilization rate, the more it drags your credit score down.

A good debt utilization rate would be to keep it below 30%. And if you could keep it below 15%, it would really improve your credit score.

Consider paying off some of your debt to help improve your debt utilization rate.

I hope you’ve found these tips helpful. If you’d like to learn more, then click the link above and you can get a free copy of my book, Focused, The Financial Freedom Formula. That way you can get your finances in order so that you can save more for your retirement and help you become a 401k Superhero to your future self.