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Raising the Score: A Journey from 625 to 739

By Kerry Lutz

In the financial odyssey that spanned eighteen months, I managed to lift my credit score from a modest 625 to an impressive 739. This journey wasn't just about numbers; it was about understanding, strategy, and discipline. It involved meticulous planning and execution, focusing primarily on reducing credit card balances, optimizing credit utilization ratios, and correcting inaccuracies in my credit report.

Before diving into my journey, let's understand the basics. A credit score, a three-digit number typically ranging from 300 to 850, mirrors an individual's creditworthiness. The major factors influencing this score include payment history, credit utilization, length of credit history, new credit accounts, and the mix of credit types. Among these, payment history and credit utilization are the most influential.

Payment history accounts for about 35% of your credit score, emphasizing the importance of making payments on time. Credit utilization – the ratio of your outstanding credit card balances to your credit card limits – accounts for nearly 30%. Lower utilization rates are better for your score as they indicate that you are not overly reliant on credit.

When I began, my credit score was hampered by high credit utilization and a couple of inaccuracies tied to medical debt. Here’s how I tackled these issues:

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1. Paying Down Existing Credit Card Balances:

One of the first steps I took was to aggressively pay down my existing credit card balances. I focused on the cards with the highest interest rates first while maintaining minimum payments on others. This not only reduced the interest I was paying but also improved my credit utilization ratio, a critical component of the credit score.

2. Bringing Down Utilization Ratios:

Understanding that my high utilization ratio was a significant drag on my score, I aimed to bring it below 10%. To achieve this, I not only paid down balances but also obtained additional credit cards. This was a strategic move: while it may seem counterintuitive to get more credit, increasing my total available credit (while not increasing my debt) significantly lowered my overall utilization ratio.

3. Balance Transfers and Managing High Utilization Accounts:

Another strategy involved transferring balances from cards with high utilization to a new account that offered an 18-month interest-free period. This not only gave me a breather from interest but also helped in distributing my debt more evenly across accounts, thereby improving my utilization ratio. Furthermore, by consolidating my debts, I was able to focus on a single payment, reducing the chance of missing payments.

4. Correcting Credit Report Inaccuracies:

Lastly, I tackled inaccuracies on my credit report. Two derogatory marks were related to medical debt that, under new Financial Consumer Protection Bureau rules, should not have been on my report. I disputed these inaccuracies and had them removed, which gave my score an immediate boost.

Throughout this period, I maintained a strict budget, cutting unnecessary expenses and allocating extra funds to debt repayment. I automated my bill payments to ensure I never missed a due date, thereby preserving my payment history.

By the end of the 18 months, these concerted efforts paid off. My credit score rose significantly, reflecting my improved creditworthiness. This journey taught me the importance of understanding credit and the impact of one's financial decisions.

Raising a credit score doesn't happen overnight. It requires a strategic approach, discipline, and patience. By focusing on paying down balances, managing credit utilization, and ensuring your credit report is accurate, you can significantly improve your financial health. Remember, the path to a higher credit score is a journey, not a sprint.

Had I known about Fortress University and Rondi Lambeth earlier, I am quite certain this could have been done much sooner. So go to Fortress University now.

Credit Scores Fall for First Time in a Decade

Kathryn Mayer

In the latest evidence of employees’ precarious financial situations, Americans’ average credit score dipped for the first time in a decade as more borrowers fell behind on payments.

The national average FICO score was 717 as of October 2023, down from 718 in July, according to FICO, a data analytics company that focuses on credit scoring services. Increasing missed payments and mounting consumer debt are contributing factors to the decrease in credit scores, FICO said.

The news is the latest indicator of the precarious financial position among employees, and data employers might want to pay attention to. Financial pressures have been mounting for workers in the past couple of years, with soaring inflation, erosion of emergency savings and other financial pressures taking their toll on workers.

Click here to read more…

Credit card debt reaches record high in US

ABC News

As reported by ABC News, U.S. credit card debt has soared over the last couple of years and recently it reached a major milestone.

Americans' combined credit card balances topped $1 trillion dollars last year, according to the Federal Reserve Bank of New York.

By comparison, combined credit card balances were $680 billion a decade ago, according to federal data.

While growing online sales have fueled the spike, business experts say the numbers are concerning as more people are not paying off their full balances and facing costly interest payments.

During the pandemic, many Americans used stimulus payments from the government to help pay off their credit card debt, but things drastically changed once the stimulus dollars dried up.

At the end of 2021, 39% of credit card holders carried debt from month to month, but that jumped to 47% in 2023, according to data from Bankrate, a consumer financial services company.

The number of Americans missing payments also has increased as the average credit card balance now stands at just over $6,000, which is the highest in more than a decade, according to TransUnion.

Credit card delinquencies are rising fastest among lower-income borrowers, millennials and people who hold other kinds of debt, like auto or student loans, according to the Federal Reserve Bank of New York.

Experts say the effects of rising inflation are one of the major factors behind the problem.

With prices rising, consumers have had to spend more on their cards for their goods.

Click here to read more…