Tag: How To Increase Credit Score

Credit Scores Are Easy To Raise: Reach Excellent

How To Increase Your Credit Score | Reach Excellent
How to Increase Your Credit Score – Reach Excellent

Your credit score determines how trustworthy you are to the lenders eyes so maintaining a healthy score is very important.

Especially if you’re looking to make a big purchase like your first home.

Whether you’re looking to add points or reach an excellent score, here’s how to increase your credit score.

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#1. Be Active

You will need to be active if you want to increase your credit score.

If you’ve just graduated from high school chances are you have 0 credit score.

You’ll need to be active by opening up accounts under your name.

If you’ve had more experience economically but are debt free, you too will need to open accounts in order to increase your credit score.

Reaching an excellent credit score will require that you have quite a history of credit use and will also be earned by a number of factors.

Let’s start with the easiest form of building credit.

#2. Utilize A Credit Card

Utilize A Credit Card To Increase Your Credit Score

One of the easiest forms of building credit is to utilize a credit card.

If you’re fresh out of high school, it can be a great way to begin building your credit through small purchases from which you can pay back once your statement has been provided to you.

Do not take up a credit card unless you are working.

A credit card is not free cash.

A credit card is merely a tool for you to prove to lenders you are responsible enough to handle a credit line.

I’ve compiled a list of ways to use a credit card responsibly here.

If you’ve used a credit card in the past but have since then buried them or your credit card expired, you’re going to need to be active once again.

Use a credit card with a low credit line just so you may continue to show lenders a history of active credit use.

Here are a few great ways you can use a credit card in order to show history while staying out of credit card debt:

Do’s

  • Use it at the gasoline station
  • Buy small groceries
  • Purchase a book from it
  • Treat yourself to lunch/dinner once a month

As you can tell from the list, these are all small ticket items you can pay back without any problem.

The key to using a credit card responsibly is to use it on things you can pay back then and there without using the credit card.

This trick will allow you to begin building your credit score from scratch and to increase it as well.

Here are the don’ts to using a credit card:

Don’ts

  • Don’t buy luxuries (tv, game consoles, phones, etc.)
  • In other words, don’t buy anything that will require you to make payments (stay away from creating that debt)
  • Do not use more than 30% of your initial credit line
  • Stay away from the quicksand (read more about it here)
  • Keep using debit for all your bills, never use your credit card for those

Let us know in the comments section below how you’re using your credit card. Have you been using it wisely or do you have credit card horror stories to share with our readers?

What happens if I stop using my credit card?

If you stop using your credit card it will automatically deactivate after 3 months of no use.

Your credit score won’t go down but by deactivating your credit card, your chances to raise your score become slimmer.

This is why it’s important to be active with your accounts.

#3. Use An Auto Loan to Increase Your Credit Score

Use An Auto Loan To Increase Your Credit Score

At some point in life, you’re going to need your own transportation, especially if you’re in the states.

An auto loan is a great way to lock you in a term of non-stop credit achievement.

While staying out of debt will become a goal for you at some point, your first auto loan will also give your credit score a massive boost which will help increase it to excellent.

Auto loans show lenders commitment and responsibility.

Each month you pay your vehicle on time will essentially reflect on your credit score throughout the years of your term.

You do not necessarily have to finance a new car.

Start with a used and reliable vehicle that isn’t so expensive.

This car should only be a tool from which it can transfer you from point A to point B while allowing you to allocate points to your credit score.

Your credit score will spike once you have paid the vehicle off.

Again, the point is to increase your credit score effectively without drowning yourself in debt.

What if I make two payments per month on my car?

Your credit score won’t really be phased by making more than one monthly payment on your car. It will only close the account quicker.

Credit scores evaluate on-time and late payments, not so much the number of payments within a statement.

#4. Pay Your Tuition

Pay Your Tuition To Increase Your Credit Score

This will apply to those who carry a student loan.

If you’ve decided to further your education in order to start a career you’ll understand student loans are no joke.

While it takes most of us a long time to close these tuitions, they certainly play a big role in our credit history and help increase our score throughout the years.

While it’s easy to disregard them once we graduate or even years beyond, it’s important to continue paying your tuition off.

If you continuously paid for your tuition while you were enrolled in school, then you most likely graduated with some credit score to your name.

Tuitions can easily become a hinderance once we’ve begun to take on more from life in general.

Fortunately, tuitions can be put on forbearance.

If you find yourself needing to take some time off from student loans, take the opportunity to gather your finances before continuing to pay off the debt.

This strategy will allow you to safely put your loans on hold without it affecting your credit score.

Once you’re ready, start aiming for that excellent credit score!

What happens if you pay your student loans all at once?

If you were paying your student loans and all of a sudden come across the opportunity to pay off your entire tuition that’s amazing!

As soon as you close your tuition account you will see a huge spike in your credit score.

Every time you close any account, you should get an email regarding one of your accounts has been closed.

If you personally don’t have any student loans but your child does, pay it a few months to increase your credit score before fully paying it off and eliminating that liability.

#5. Pay Your Rent on Time

Pay Your Rent On Time

Though this might seem like a no-brainer, it must be mentioned.

Pay your rent on time in order to increase your credit score.

Whether you’re currently financing a home or renting, timely payments builds trust with lenders and property managers.

The last thing you’d want is to run into a bad rental history when applying for a bigger unit or a new home.

Impress lenders with a great record of paying rent on time.

This will increase your credit score and help you reach an excellent score quicker.

Rent should be one of your biggest priorities.

Utilities Also Help Increase Your Credit Score

Gas, electricity, water, garbage, & internet all help increase your credit score.

All bills have a due date and accumulate towards helping you reach an excellent credit score.

Keep in mind that if your utilities are not under your name (e.g., your spouse) then you will not earn points.

This applies to any bill you might pay but don’t otherwise have your name to.

What If I have A Lot of Debt?

If you’re have a ton of debt, continue paying down your debt.

Never stop paying down the minimum.

Although your debt continues to grow due to interest, you’ll have to keep paying it off so that your credit score is not affected.

Read: Debt Sucks | Here’s How To Pay Off Thousands In Debt

We published a post on the best strategy to pay off debt using the snowball effect method.

If you are having difficulty paying off your debt, be sure to read it and begin to start changing your life today.

Should I Open Multiple Credit Cards?

Opening multiple credit cards will result in a higher possibility of falling into credit card debt.

One credit card is enough to boost your credit score even after you’ve managed to pay off large amounts of debt.

Also, the more credit cards you apply for will result in a drop of credit score.

Keep an eye out for it as it will happen even when you apply for your first one.

Do not worry as it is normal and will eventually pick up after a few months of you establishing trust with the lender.

Do not open multiple credit cards and do not spend more as the lender increases your credit line.

It’s how they get ya! Do not fall victim of this quicksand.

What if I have a business and need the credit lines?

If you’re a small business and you need the credit lines to grow, then it should be no problem.

It only becomes a problem if you can’t repay your balance when you receive your statement.

What are the best type of credit cards to use?

Use a credit card that’s going to provide you with more value than just borrowing money in advance.

One of my credit cards give me cash back, or discounts on certain purchases.

This money accumulates over time resulting in money being saved over a long period of time. Another benefit this card has is that it has 0% APR during its first year.

0% APR cards can help you out of a sticky situation.

You can use this card to close the balance of another card that keeps rolling over in interest.

The 0% APR card allows you to pay your balance without the extra fees.

Cards like these can actually help you recover from debt and increase your credit score at the same time!

Will checking my credit score drop it lower?

Despite what someone older than you might have said, no; checking your credit score does not lower it.

What causes credit score to drop?

  • Late payments
  • Accounts sent to collections
  • Hard inquiries on an account
  • Any sort of temporary credit score check

The only exception on this list is the last bullet. Whenever you’re applying for something that requires a credit score check know that it will drop.

This is only temporary however and you can expect your score to rise after a few weeks to a few months.

How Do I Reach an Excellent Credit Score?

How Do I Reach An Excellent Credit Score?

An excellent credit score will require you to reach a 700+ credit score.

In order to reach a 700+ credit score you will need to have a great history of paying on time.

The more accounts you have open will mean the greater chance you have of obtaining an excellent credit score sooner than later.

While balancing a car loan, tuition, rent, and a credit card simultaneously can sound stressful, it’s certainly doable given that you are managing your finances properly.

Most people will buy too much car, or too much house and get themselves into credit card debt. It’s these sort of financial horror stories you do not want to live.

Even if you aren’t simultaneously paying different lenders every month, the important thing is that you’re responsible with the expenses you do have.

Pay on time every month and your credit score will continue to increase no matter how long it takes to reach an excellent credit score.

Frank Nez How To Get Clients To Pay You When They're Past Due

What’s Your Credit Score?

Let us know what your credit score is below. Do you have an excellent credit score? Share with our readers what you’ve done to increase your score!

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How To Set Financial Goals: 10 Simple Steps!

How To Set Financial Goals: 10 Simple Steps!

What Are Financial Goals?

Financial goals are the big visions you have for your personal finances and the way you plan to spend your money.

These financial goals are what help us achieve ultimate success and financial freedom. They also make our dreams easy to identify.

Why Do Financial Goals Matter?

Financial goals push us to keep moving forward in our day-to-day lives with a relentless focus on reaching life changing goals.

They’re what will determine how comfortably we live our lives when we’re ready to retire.

Financial goals are what separate the lower, middle, and high class.

*Key Takeaways*

  • You’ll learn the importance of becoming debt free
  • How to adopt winner habits in order to secure your financial future
  • Ways to diversify your income

If you’re here it’s because you have a genuine curiosity on how to succeed financially in life. The great news is that what led you here is no coincidence. I strongly believe we attract into our lives what we think about. Navigate this platform and manifest.

Here are 10 ways you can begin setting financial goals for yourself in order to eliminate any financial insecurities you might have.

Don’t forget to subscribe to our newsletter to be notified when a new post is published!

#1. Paying Off Debt

Financial goal to Pay off debt
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Paying off debt is a financial goal everyone should strive for. Accomplishing this goal is your ticket to becoming financially free.

Everyone wants to be debt free but not everyone is willing to put in the work to break from the shackles of debt.

Some benefits to paying off debt include:

  • Freeing up resources to save and invest
  • Eliminating monthly payments to lenders
  • No more interest
  • Surge in credit score points

Paying off your debt will require temporary sacrifices, such as living below your means and delaying gratification.

I’ve found that the snowball effect is very efficient when it comes down to paying off debt. You essentially start from the smallest debt and work towards the biggest debt. You can read more about it below.

If you find yourself straying from paying off your debt, remember why you started in the first place. Crush this financial goal so you can focus on all the wonderful things in life that truly matter!

Read: Debt Sucks | Here’s How To Pay Off Thousands In Debt

#2. Creating an Emergency Fund

Financial Goal to Create an emergency fund
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There are two types of emergency funds. One is a temporary emergency fund consisting of at least $1,000.00.

The second type of emergency fund is a hefty nest worth 3-6 months of expenses in case of unforeseen circumstances that may occur (and they will).

This financial goal provides you with security for when s*** hits the fan and allows you to act without the stresses caused by the lack money.

Here are some real life instances where an emergency fund can become a helpful tool:

  • To cover the cost of an unexpected medical expense
  • Keep you afloat during a recession
  • Means as a cushion to fall on if you become unemployed
  • Capital if your business loses revenue

A great way to begin your financial journey is to create a temporary emergency fund so you can focus on paying off your debt first.

Once you’ve paid off your debt, start working towards building your hefty nest worth 3-6 months of living expenses.

Read: How To Create an Emergency Fund and Why It’s Important

#.3 Saving Up For A Home

Saving up for a home is a great financial goal to crush. If you dream of owning your own home some day, you’ll need to save up for the down payment along with the fees that make this possible.

While taking up a home loan is considered a liability, it becomes an asset once you’ve paid it off.

A few of the benefits to owning a home include:

  • Security and stability
  • The ability to cash out equity on your home
  • The privilege to selling your home and earning money on increased value
  • The option to renting your property resulting in passive income

Read: 10 Successful Ways To Save Money During A Recession

#4. Increasing Your Credit Score

Financial goal to Increase your credit score
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Increase your credit score – Franknez.com

Your credit score demonstrates how responsible you are handling other peoples money.

Lenders tend to accept credit scores over 650 and even 600 in some cases. The thing about our readers though is that they don’t settle for average. You are anything but average.

One of your financial goals should be to reach an excellent credit score of 700 and above.

An excellent credit score will provide you with access to just about any type of loan whether it be a home, car note, or business loan.

Read: How To Increase Your Credit Score | Reach Excellent

#5. Making Your First Investment In The Stock Market

Wall Street Bull - financial goal to invest in stocks
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This financial goal is probably the most intimidating goal of them all. You most likely have thought about investing in the stock market but perhaps don’t know where to start.

We walk our readers on how to invest in the stock market step by step here.

The stock market might not be everyone’s choice of investment, but for those of you who want to partake will see just how easy it is to purchase shares and see your money grow.

Before you begin to invest in the stock market, be sure you:

  • Are debt free in order to maximize your deposits in the market
  • Have created a strong and healthy emergency fund
  • Acquire the confidence to proceed with investing in the market

Investing in stocks has the the biggest potential if you’re striving to build wealth. With the S&P 500 yielding an average 7% in return, it’s highly unlikely you’ll ever see this percentage from any bank or institution.

Are There Other Alternatives To Investing?

Invest for your financial goal

A very good alternative would be to put your money in a high yielding or money market account.

While your regular banks pay you 0.01% APY, high yielding banks can pay up to 2.05% APY!

Rates fluctuate from time to time depending on the economy, but it’s a great money move; especially if your financial goal is to grow your savings account.

Here’s a list of high yielding banks you can check out so your money can earn you a little bit of interest (money while you sleep):

*Rates are subject to change

These three banks are all FDIC insured meaning you are protects up to six figures (you’ll have to read the fine print for the exact amount).

While the rates aren’t amazing per say, they have been higher in the past and will continue to fluctuate.

BMO Harris is the only bank that requires a minimum of $5,000 to qualify for their interest rate. Marcus & Ally don’t require a minimum deposit to qualify.

Read: 5 Ways to Earn Leveraged Income: Start Now

#6. Growing Capital to Build A Startup

financial goal to build capital

Perhaps you’ve been wanting to start your own company or start a new business venture.

Growing capital is a great financial goal to set that will help you start up your company. Use these resources to purchase equipment, hire a team, and build your business.

(A) Set a specific goal.

The amount of money you’ll need to raise will highly depend on the type of business you’re going to be creating.

(B) Find your niche.

Find out which industry best suits you according to your skills and knowledge.

Read: How To Advertise Your New Business For Organic Growth

#7. Preparing For Retirement

Yahoo Finance reported from a 2019 survey that 64% of Americans will retire broke.

I think it’s safe to make retirement a priority when it comes to setting financial goals.

Retirement should be the time where we can finally look back and feel like all the hard work has paid off. It should be that time period where you can sigh in relief knowing you won’t ever have money troubles.

Around this time you’re most likely earning passive income from a variety of sources. Perhaps your investments are paying tremendous amounts of dollars every month or your online business keeps generating income.

Money during this time is working for you and you can enjoy anything your cashflow is able to provide.

How Can I Prepare For Retirement?

Preparing for retirement really includes a lot of the things that we’ve covered over in this post. Such things include:

  • Start a 401(k) with an employer match if available
  • Save money using a high yielding or money market account that accrues interest
  • Free yourself from debt in order to maximize your savings
  • Invest in the stock market
  • Invest in real estate
  • Increase your income

Preparing for retirement will become more of a challenge if you’re not debt free. The earlier you begin to save for retirement, the longer you have for compound interest to put your money to work.

Read: How To Stop Living Paycheck to Paycheck

#8. Developing a High Income Skill

financial goal: High income skill
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People hit their income peak around the ages of 40-50. Developing a high income skill, especially if you’re younger, should be a financial goal you should be meeting every year.

By increasing your income every year, you’re able to come up with resources to pay off debt, invest, save, and so much more.

How Can I Develop a High Income Skill?

Develop a high income skill by providing tons of value in your industry and workplace.

The effects of providing value in the workplace result in a promotion or raise, or can be driven by an increase in sales figures.

Read: These Are The BEST Strategies To Increase Your Sales

If you’re nowhere near the income peak age you should be focusing on making as much money as possible early on in order to free up your resources so you can start focusing on the things that really matter.

Remember, you cannot grow wealth being in debt.

#9. College Savings

financial aid college savings

A financial goal that’s popular amongst parents is saving for their children’s college tuition.

A college savings plan will come in handy when your children are ready to take that leap in the real world.

Saving now can help you get a great start. We suggest using a savings account that will accrue interest; this way you earn additional money on top of your principle and recurring deposits. Use compound interest to boost your savings goals!

According to the Wall Street Journal, the average tuition is a whopping $37,172!

It would be wise to start saving for this goal as soon as you can. Personally, we’d opt out for teaching our kids to become entrepreneurs instead so they can earn as much money as they desire. It’s the financially responsible thing to do, but hey! We need all type of professionals in this world.

#10. Financial Education

Financial Education
Franknez.com

What better financial goal than to further your financial education!

If you’re not 100% certain about how something works, invest time in yourself and do the homework until you’re confident about such topic(s).

People used to read about everything, now you can watch videos or read blogs like this one for more information.

It took me about 3 months of studying and researching how to invest in the stock market before committing to purchasing my first shares of stocks.

I created my Vanguard account and although I had done some research, it took a while before I actually proceeded. Financial education allowed me to grow confident in all things I do financially.

I wanted to make the process of investing in stocks easier for my readers so I wrote on how to invest in the stock market (step by step). You can read it here.

Don’t forget to subscribe to our newsletter to be notified when a new post is published!

Become Financially Confident

Dear readers, I encourage you to step outside your comfort zone and educate yourself as much as possible so you may become financially confident and financially independent.

Break the cycles and begin to develop winner habits to secure your financial future.

Let us know in the comments section below which financial goal(s) you’ve taken up! Our readers would love to hear what you’re working on.

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