Credit

Pay more than the minimum payment on credit cards to improve your credit.

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• Pay bills on time consistently to build and keep a high credit score.3
• Upgrade to better cards with higher limits as your credit improves to increase available credit.1

Dispute items on your credit report that are older than seven years.

Credit bureaus cannot hold onto things forever.

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Avoid any lender that asks for upfront fees.

Those are usually scams.

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Use credit cards instead of debit cards for better fraud protection.

Credit cards offer superior defense against fraud compared to debit cards.

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Anticipate a short-term decrease in credit score following repayment of an old loan, since this lowers average account age and total available credit.

Account longevity impacts scores; closing older accounts reduces these metrics.

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• Do not close old credit cards, as doing so can cause a significant drop in your credit score.1
• Keep old credit accounts open to preserve your credit history length and available credit limits.1

Avoid closing cards with low balances if other cards are maxed out, as this can cause your credit utilization to hit 100% and tank your score.

If you close the card with the low balance, creditors look only at the maxed-out card, resulting in 100% credit utilization.

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• Keep credit cards with no annual fees open to maintain your credit history length and total available revolving credit, as closing them can negatively impact your score.5

Understand that the visible credit score number represents only a small fraction of the data banks use.

The actual number is like 5% or less of the information used in decisions.

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Dedicate time to reviewing past bank statements to identify where you are wasting money and why you face surprise bills.

This helps uncover expenses you should have saved for, such as large unexpected costs like tires.

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Focus on increasing your bank account balance rather than obsessing over your credit score number.

The bank balance is considered much more important, and focusing on it may help the credit score take care of itself.

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Throw all extra money at your smallest debt first, then apply that same strategy to other debts once it is paid off.

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Freeze your credit accounts instead of paying for account locks.

Credit bureaus are required to provide freezes for free, whereas locks are often paid services they push.

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Use the Avalanche method to pay off debt by targeting the highest interest rates first.

The snowball method (paying lowest debt amount first) was taking too long.

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Avoid taking on costly debt solely to improve your credit score.

Taking on debt to please the credit score is dangerous and can lead to overspending traps or financing unnecessary items.

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Build an emergency fund after paying off debt to prevent falling back into balances due to unexpected expenses.

Without cash reserves for emergencies like car repairs, you may incur new debt quickly.

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Use credit card programs designed to help build your credit score.

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Store proof of loan payoff letters in an extremely safe place to prevent creditors from falsely reporting late payments.

Creditors may forget and report you as past due to credit bureaus.

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Verify that a settlement offer provides a substantial discount before accepting, as small savings may not justify the credit hit.

One person found their settlement was only slightly less than the full balance and regretted the negative impact on their credit.

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Keep all correspondence, emails, and altered bills regarding skipped or deferred payments.

These documents serve as proof that you did not need to pay for that month.

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Avoid carrying a balance on rewards cards, as the higher APR and interest costs usually outweigh the rewards earned.

Rewards earned may not cover the difference paid in interest.

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Use credit cards strictly for points and cash back, ensuring you pay off the balance completely.

Leaving a balance results in interest and negative credit score impacts that instantly cancel out the rewards.

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Avoid running credit checks for rentals or other non-loan purposes right before applying for major credit like a mortgage.

Any additional credit checks can negatively impact your rating when it really matters for things like buying a house.

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Avoid disputing valid debts solely to raise your score temporarily, as this may prompt creditors to pursue collection efforts again.

Disputing valid debt may cause the holder to become interested in pursuing the old debt again.

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• Dispute inaccurate collections accounts on your credit report even if previous disputes were denied.1

Dispute incorrect information on your credit report regardless of how long ago it occurred.

Lenders can revise the negative impact on your credit by updating the record now.

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Check major banks for free FICO credit scores instead of relying only on third-party services.

Many major banks provide FICO credit scores.

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Check if unknown debts or co-signer relationships have gone to collections, as this can cause sudden score drops.

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Manually track bill payments using a list ordered by due date and check your bank account regularly instead of relying solely on autopay.

Autopay can randomly glitch out without any fault of yours.

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Use your credit card for regular necessary purchases like gas or groceries to establish credit.

This safely starts establishing credit.

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Negotiate a 'pay for delete' agreement with collection agencies to have negative marks removed from your credit report in exchange for payment.

• Only shady agencies may agree to this.

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• Negotiate with collection agencies by making an initial settlement offer below the full amount owed, potentially including a request for deletion.2

Verify how long your specific credit card provider waits before reporting delinquent payments to credit bureaus.

Credit card companies do not typically report delinquent payments immediately; one former Citibank employee noted it was 45 days when they worked there 20 years ago.

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If you suspect identity theft, immediately freeze your credit reports with TransUnion, Experian, and Equifax.

This prevents anyone from running your credit without notifying you.

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Accept that poor credit leads to higher interest charges because lenders view you as objectively risky.

Credit scores measure risk; the riskier the borrower, the more interest is charged.

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Pay off credit card balances before the statement closes to improve utilization statistics.

It helps improve your utilization statistics.

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Build a diversified credit portfolio with different account types, long-aged accounts, on-time payments, and very low utilization.

This combination skyrockets your credit score.

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Target accumulated interest first when making extra payments on student loans to prevent it from capitalizing into additional principal.

Otherwise, the interest will likely capitalize into additional principal.

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Call your credit card issuer when they charge an annual fee, state you want to close the account because of the fee, and accept a statement credit equal to the fee amount to keep the card open.

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Focus on building an emergency fund rather than obsessing over temporary credit score drops after paying off debt.

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Avoid maxing out individual credit cards, even if your overall utilization is low.

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Track bills and payments meticulously to ensure everything is paid on time.

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Keep a detailed spreadsheet to monitor all income, expenses, savings, loan repayments, and total net worth.

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Be cautious when searching for transcription side gigs, as many companies appear to be scams.

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Start saving for your children's futures soon to provide them with assistance later in life.

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Begin improving your financial situation today, as it is never too late.

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Consider Navy Federal Credit Union for mortgages if eligible, as they perform manual underwriting.

Manual underwriting may help those with unique situations.

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Understand that in some countries like Denmark, credit scores have less impact because only banks know your score.

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Consider renting if you cannot afford unexpected expenses, as paying extra for rent offers more peace of mind than owning.

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Do not attempt to hide from repo companies, as they are highly effective at locating people and assets.

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Acknowledge that people not born into wealth generally face significant difficulties achieving it.

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