“The Credit Game Plan” is a book that gives you everything you need in order to understand how credit works and what steps you need to take to improve your credit so that you can achieve your goals! Everyone’s situation is different and credit advice is not “one size fits all” and so it is so important for you to first, understand how the credit works, and second, take your specific data from your credit report to put together the plan that is best for you. This book helps you do exactly that!
HOW TO BUILD CREDIT
When you are in the process of improving your credit you may need to add an account or two to help you build your credit. Payment history is the biggest factor in how FICO credit scores are calculated and so you have to make sure you have a few accounts that are open and current.
Once you know that you need to open an account or two the next question is “What type of account should I open?”.
The best type of account that you can open to build credit is a credit card. Many people are against credit cards because they either had a bad experience in the past and they may not trust themselves or they heard Dave Ramsey say that credit cards are bad. Credit cards are not bad and do not cost you any money at all if you pay the balance off in full each month. And yes, you can pay your credit card balances in full each month and still have very good credit scores! Use them for things that you were going to have to buy anyways like gas and groceries and then turn around and pay off the balance. This will build your credit and not cost you a dime! If you get a loan to build credit there is no escaping the fact that you will have to pay interest on the loan also, loans have a fixed number of payments and then the account closes and so that account no longer helps you anymore and this is why credit cards are the best way to improve your credit scores.
You may be thinking “How in the world can I get approved for a credit card with my credit scores being as low as they are?” or “I have already gone through this in the past and I just don’t want to put myself in a position again where I may incur large amounts of credit card debt”.
The solution to both of these problems is to get a secured credit card to help you build credit. This allows you to put a small amount down as a security deposit and then you will receive a card in the mail with that amount as your credit limit. It will report on your credit reports just like an unsecured credit card and will help to build your scores! This route is very low risk and you do not have to worry about getting declined which is what happens many times when you apply with a bank.
TRACKING YOUR PROGRESS
When you start the process of improving your credit scores you MUST have a way to review your credit reports and monitor them monthly. Just like when you are budgeting and saving money you need to get used to spending a lot of time in your online banking app so that you know how things are going and can make changes when needed. Most people use a site called Credit Karma to monitor their credit scores and reports online because it is a free service and their advertising is everywhere. However, Credit Karma is not actually a credit report it’s really just an overview of the accounts that are being reported by the credit reporting agencies and your account balances with those accounts. An actual credit report shows you a lot more information about each account that you will need to improve your credit such as account numbers, date of last activity, date last reported, and also you will get more history on each account from all three credit reporting agencies. It is also important to note that the credit scores that you see when you log in to Credit Karma are NOT the same as the credit scoring models that lenders use and so be careful about trusting what you see with Credit Karma.
There are many websites online that you can go to get a detailed credit report that shows all three credit reports. Some of these sites can be expensive (MyFICO.com) and so we have a site that we recommend that will give you everything you need but will not overcharge you!
If after pulling your credit report online you review it and feel overwhelmed and are not sure what steps to take first then click below to schedule a free consultation with our team. We will review your report with you and teach you how to review your report and we will help you put together your game plan so that you know exactly what you need to do in order to get from point A to point B as quickly and cheaply as possible!