Simple Mistakes to Avoid

One of the simple mistakes I see people making is not knowing what's on their credit report and not taking care of their credit score.

It’s one the easiest things to do and it’s also one of the easiest things to get messed up.
That’s what I want to talk about today.

But first, Let me ask 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. I’m Jonathon Schultheiss and welcome to the becoming a 401k superhero videos.

Why is your credit score important? Did you know that insurance rates, job applications, rental applications, as well as interest rates are all affected by your credit score?

Your credit score can save you or cost you lots of money.

Here is mistake number one. Not knowing what’s on your credit report.

CNBC reports that more than 1/3 of Americans have at least one error on their credit report. If you don’t know if you have errors, it could be costing you big time.

Here’s what you do about it.

There are dozens of free credit monitoring services. Credit Karma is one of my favorites. Plus, most credit cards offer free access to your credit score too.

You just have to take the time to look at your credit report. Once you get signed up, it will take you less than 2 minutes to look at it.

I learned this the hard way when I applied for a mortgage, and they came back and told me that I had a charge off on my credit report. It was an error, but it took me months to get this error removed from my credit report.

I learned to keep an eye on my credit report the hard way. So don’t wait until you’re applying for something before you check your credit.

In fact, now I get emails every month that tell me that my credit score has changed.

And here is another secret that most people don’t know. Your credit score changes from month to month.

You see, as the amount of credit you use changes, your credit score will fluctuate.
This is called debt utilization ratio. This is your total available credit, from mostly credit cards, and the percentage of that you use.

So if all your credit cards combined is $10,000 and you carry a balance of $5,000, then you have a 50% debt utilization ratio. You need to understand this because it is the second biggest thing that affects your credit score.

Here’s another secret, if you are planning to apply for additional credit, you can make your credit card payment early and lower your balance which lowers your debt utilization ratio, and increases your credit score. This may help you get a better interest rate.

All of these are great reasons why you need to know your credit score and monitor it.

When you monitor your credit score, you save money and improve your financial situation. And this is how you become a 401k superhero to your future self.

Want to learn more about credit scores and becoming a 401k superhero to your future self? Download a free copy of my book and checkout chapter 4 on improve your credit score.