Credit 201
Welcome to Credit 201! You are now several steps into your Credit Success journey. In this course, we will cover:
- How do I build credit?
- What are the three important dates for any credit account?
You can have all the good credit score building material you need for less than $5 dollars a month in interest payments. Calling back to Credit 101, the shroud of mystery the credit scoring environment is in is there to protect a not-so bulletproof system. This mystery is used by big corporations to greatly influence the decisions that we make as consumers, so that when the time comes to get a loan or use our credit scores… we aren’t in a position to argue for a better deal. There are several of you reading this article now that have applied for a piece of credit and have felt powerless before signing on the dotted line. Our FREE credit content is here to give you back the power!
To build power in that scenario, you must build your scores. Again, for just $5 dollars a month in interest payments, you can increase your scores month-over-month. The Credit101etc recommendation on pieces of credit to build your scores are:
- Two credit cards with a low spending limit
- One low-amount Secured Share loan from a local Credit Union
We have discussed how to build credit on a budget, which leads us to becoming an expert in your credit accounts’ billing procedures. Just having those three pieces of credit isn’t enough… managing them well is where your scores will increase. To do so, keep your 2 credit cards at around 5% balance and pay your monthly dues for your secured share loan on time.
Keep a document where you answer the following for every credit account you have:
- What date is payment due?
- What date does my balance accrue interest?
- What date does my account report to the credit bureaus?
If you have any doubt as to when these three dates are… call your creditor and don’t hang up until you know for certain. Each creditor is different, granted there may be some overlap, but a great rule of thumb is assume they are different until told otherwise. If an account is due on the 15th but reports on the 16th… there may not be enough time for their system to process your payment on time and the credit bureaus are told you are late even though you paid on time!
We know how to build credit on a budget and how to become an expert in billing procedures. It’s time to get personal! Do some or all of your credit accounts match our recommendation? Do you know when those three important dates are for each of your credit cards?
Credit Management including where to bank – probably the most overlooked aspect of credit scoring. Did you know that you can have four pieces of score building credit, never have a late payment and never have anything negative hit your credit report and your scores will remain in the low 600’s? Or that very same person can go from acquiring the right types and number of accounts and be at 800 in less than a year? Find out what the rules are and follow them.
I have no clue why people use big banks. Do you remember this? Wells Fargo admitted that between 2002 and 2016, it falsified bank records, harmed the credit ratings of customers, unlawfully misused their personal information and wrongfully collected millions of dollars in fees and interest.
Unless you have a good reason to bank with the big banks, using local, community banks and credit unions a by far the best way to go. Creating a relationship with community banks or credit unions will serve you well once you understand how to get the most out of what they have to offer with your bank or credit union.
Brian Chamberlain
Credit Score Specialist
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