If Cash is King, Credit is Queen. and the queen this time is your..FICO score.
With the understanding of how credit score work, and how the lender view it, coupled with careful planning and execution, you will be able to revamp your credit and receive all the benefit that belong to an exceptional borrower: Free airmiles, signing bonus, Rock bottom interest rate, etc..
of course There are no secret to hide so here it is… .
The below guide is an advance guide for those that already have good credit and looking to max it out.
1. Think before you swipe
Well, This is pretty obvious. If you don’t think you can pay it back, don’t swipe it. When i was in college i have no idea how could these guys and gals are swiping their life away.. buying..lunches and other thing they know they can’t afford. I was eating ramen noodle day in and out and i couldn’t not understand. I was working a decent part time job back then and i barely find enough money for gas and other necessary expense. Maybe someone can make sense of this but i can not make sense of buying something for 10$ and then pay like 20% interest on it.….
It’s hard enough to start with 0 in your balance sheet. i don’t know why some people choose to start with negative in the balance sheet
2.Pay on time – and on the same date every single month
Pay on time – Another obvious one. Not much to discuss here. i set all my bill on automatic payment as much as i could. However, it will get even better if you call your bank and all your lender and ask them to set all the statement date to be on the same date. part of your credit score include consistency and by setting all the due date to be the same. you will get a little boost on your score
In Short, pay on the exact due date – not early – not late and show consistency.Computer algorithm that qualify your credit card or loan will love it
3. clean up your credit profile
I am guilty of this because i have not done this yet. However, make it a goal to call all your credit bureau (TransUnion, Experian) to clean up your profile. make sure you have correct address, correct job, correct birth date, etc..This will make automatic approval for credit card a whole lot easier.
4. always do 0% down
For example, if you want to put down 20% to buy a car. Always do 0% down 1st, then pay whatever amount you want on the 1st payment. This will greatly step up your score and make your profile looks good. An 80% loan balance is ideal from most lender eyes.
5. Remember the 80% 50% 25% 0% mark
You will get a score increase whenever you pay your loan down to the 80%, 50%,25%, and 0% mark. Incase you have some extra cash and want to increase your score immediately, go pay a loan down to one of these mark and see your score jump the next month
6. Credit history
Another basic one. There is a reason i am keeping my $1600 4% student balance loan and pay like 50 bucks for my next 10 years. the interest they collect is nothing, But paying this loan off will hurt my score so..NO
7. Departmental Credit card
If you think the $10,000 Victoria Secret card limit can get you to the next level – think again. 20 years of consistently buying underwear does not help when you are asking for millions dollar loan on apartments
Limit the use of Consumer/Departmental credit card. The only time i would apply is if they have extreme crazy perk that i can’t refused. that 20% off your 1st purchase won’t justify the benefit of having a department credit card
8. Out opt of all promotion
Go to https://www.optoutprescreen.com and opt out on all promotion. or go to the extreme and call the company that send you all the credit promotion and try to opt out. Prescreen make you a passive borrower. Lender does not like it. try your best to clear your name and your mailbox from all the promotion. You want to be an active borrower, not passive.
9. Read the Banker Code
This is a great book to shift your mind on how how to move from consumer to become a lender. I can wrote a whole other blog about this book but basically,instead of borrowing the money and spend it, try to borrow it to invest, or lend it out with interest. This require a seismic shift in your mindset and the book will help you with it. If you don’t understand how the bank work and their rule. It will be hard to play their game
10. Monitor your score
There are plenty of tool such as Credit Karma, Mint, Discover Card, Citi Card that will let you monitor your score for free. if you can track it, you can manage it.
10.5 Enjoy your 800+ Score with all the perks that come with it.