It feels like it has been FOREVER since we’e done a check-in and challenge. That one skipped week felt like an eternity. It’s our last week of challenges for our financial wellness theme and this week I want to talk about credit. I am (obviously) no expert, but I’ve done a ton of research on this topic and through conversations with different people in the financial industry have learned a lot. Having good credit is really important, we know this, but building credit and attaining a good credit score can be daunting. It wasn’t until we started looking to buy a house that we really got serious about our credit and making sure it was the best it could possibly be. The thing about credit is it’s not something you can just fix or create overnight. It takes time, but the good news is there are plenty of ways to get on the right track. Looking forward to hearing your progress from our last challenge about budgeting money.

This Week’s Challenge: Build/Improve Your Credit

The questions I got about credit ranged from how to build it if you don’t have any at all to how you can improve it if it’s not that great. Your credit has an affect on a lot of your financial wellness. It impacts how much you’ll pay for a car, how much you’ll pay for your home (buying or renting), interest rates on credit cards and loans, even getting utilities like electricity in your apartment or house. This week’s challenge is to not only get a better understanding of your current credit situation, but also to take the necessary steps to build and/or improve it.

Jess Ann Kirby talks about credit scores as a portion of financial wellness
Helpful Tips

-If you haven’t done so in the last few months, check your credit score. You can request a free copy of your credit report from each of three major credit reporting agencies once a year at AnnualCreditReport.com. Many credit cards now also offer your credit score on your monthly statement.

This is a helpful post about credit scores and the impact of your number range. No matter where you are, don’t fret, you can always improve your score.

-Identify the steps you need to take to improve your score. This post clearly lays out steps you can take to improve your score. Some quick fixes are paying down balances on credit cards (the goal is to have a good debt/credit ratio). Even if you’re paying off your balances every month, if you max out your card that amount may be reported to the credit bureau, so if you can, pre-pay any balances.

-Keep old credit open. Having a long history is great for your credit score, so if you’re looking to consolidate, don’t get rid of the oldest credit cards you have.

-If you’re looking to get your score up quickly, check out this post. Before we started applying for a mortgage, we paid off all of our debt (we had been saving for a solid year) and it helped both of our credit scores immensely. We then only used 2 cards on a regular basis and paid them off well before the due date to help our scores. It’s amazing how quickly you can get your score up doing that.

Good luck! Can’t wait to hear about your progress from last week. xx