No Hay Nada Más Difícil Que Vivir Sin Credit
The mystery is over. Boosting your credit score isn’t some cold case any one of your umpteen true crime shows are trying to solve 🕵🏽♀️ or not knowing where the love of your life is “esta navidad” as the Bukis would say.
There are tried and true steps that will make your credit work for you and give you the options you deserve. Read on and see you at the top… of your score! 📈
- Pay bills on time 📅
Yes, we know the invitation was at 6, but showing up at 7 is Latin@ time, right? Wrong! When it comes to your credit score, your payment history is the biggest factor and late payments can stick around on your credit report for over 7 years! So pay all your bills on time. Go the extra mile and pay them early if you can. If you are really busy, set them up to auto-pay every month so you never accumulate any late fees. Bonus if you’re paying in full each month and avoiding interest because there’s nothing interesting about interest being charged to your account! If you’re not able to pay everything on time, prioritize your bills and the moment you are able to pay delinquent accounts, contact the merchant to see if they’ll agree to not report the late payment to the credit bureaus as a courtesy. If the pandemic has affected your finances, contact the merchants for assistance with your account(s).
- Make frequent payments 💸
Pay down your balances whenever you can. Maintaining a lower overall balance will affect your credit utilization, which highly affects your score, too. If you spend say $200 every week or about $800 every month but you pay $100 of that off every week, your balance would stay well below what you actually spent that month. The full $800 total will only show up if you wait until the end of the month to pay any balance whatsoever and thereby utilize more of your credit available.
- Ask for higher credit limits 🚀
When your credit limit increases while your balance stays the same, your overall credit utilization instantly lowers. This improves your credit. Ask your card issuer if you’re able to get a higher credit limit without a hard credit inquiry which can actually hurt your score temporarily. If you’ve recently gotten a raise or have had a relationship with this card issuer for at least a year, chances are they’d be willing to help you out.
- Dispute credit report errors
Mistakes on your credit report could be affecting your score. Make sure to check your credit reports every year. You can order them free from AnnualCreditReport.com to see scores and credit history reported to the 3 credit bureaus, Equifax, Experian and TransUnion. If you see an error, or an omission, open a dispute with each bureau that shows the error. This process will take a while as bureaus have 30 days to investigate and respond. But the sooner the better—if there is a major error, a correction could mean a sharp uptick in your score. 🏆
- Become an authorized user 🎟️
Here’s one favor that can work wonders. You won’t have to work hard, except when asking your friend or relative to add you to their account as an authorized user. While this can help fill out your credit file and your credit history, it will most certainly lower your credit utilization. You don’t actually have to have physical access to the card or even know what the card numbers are for this to benefit your score. So in case your Tía doesn’t trust you with her card, assure her you will never be able to use it if you don’t know the numbers!
- Use a secured credit card 🔐
You can call this one pay to play or pre-pay. You pay a deposit—usually the same as your credit limit and then spend like normal. You still pay the card every month, or throughout the month if you’re catching on, and your security comes from the deposit you continue to replenish every month. Make sure to have a card that reports to all 3 credit bureaus so your timely payments and credit utilization here counts towards your overall credit score.
- Keep credit cards open 🚪
While paying off cards may make it tempting to demolish them with scissors telenovela-style… Don’t! Leave these cards open and tucked away in a drawer or a safe deposit box. Use them once in a while so the creditor doesn’t close them but do not close them yourself. Having the credit limits from these empty cards helps your credit utilization by making the overall credit available higher across all accounts.
- Mix it up
If you’re only holding credit cards but no loans—or loans but no credit cards, it’s time to spice it up! Make a credit salsa with both credit cards and loans. This will boost your credit worthiness and make you look more responsible to card issuers and loan creditors.
For more financial tips, keep up with SUMA and SUMA-FY your financial goals!
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