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Building A Strong Credit Score

Building A Strong Credit Score

Recent developments in credit scoring have made it possible to know how likely you are to default on your debt! This is an important piece of information when looking to improve or rebuild your credit score.

By understanding what factors influence your credit rating, you can begin to correct mistakes that may be hurting your score. In this article, we will discuss some strategies for improving your credit score by focusing on paydown and elimination of debts.

Building a strong credit score takes time, so don’t expect significant changes immediately. However, if you use these tips as part of a longer-term plan, you will see results!


Many people spend money liberally during times of economic growth. As such, they increase their monthly debt payments while also adding new debt obligations to repay.

When the economy begins to slow down, many individuals struggle to keep up with paying off old loans and establishing new ones due to limited income.

Some of these borrowers fall into a vicious cycle where they continue to try and grow their money supply but never seem to find the cash needed to do so. At this stage, additional loan opportunities become more difficult to come across.

As a result, many potential borrowers are left waiting to establish long term relationships with lenders.

In addition to limiting borrowing opportunities, most financial institutions require close examinations of your personal finances. Due to this, potential customers are often discouraged from seeking credit cards or other forms of financing.

Limit your debt

While it is okay to have a small amount of credit card debt, you should know that having too much can hurt your score. Your FICO scores look at how many loans you have as well as the balance of each loan when determining your creditworthiness.

A person with excellent personal finances will have little or no debt. People with strong personal finances also are likely to keep their debts under control because they do not want to incur additional interest payments.

If you enjoy spending money on things, consider investing in them instead. Buying a new television show or movie may cost a few dollars, but it will pay off in the long run by improving your viewing experience.

Likewise, buying gadgets or electronics items could help build your reputation as a savvy shopper. Many people use these products for an extended period of time before writing down their bad credit.

However, staying within budget must be done consistently to work. Set up recurring bills such as insurance or monthly phone services and ensure that nothing gets pushed aside due to lack of funds.

Keep your credit card balance low

Building a Strong Credit Score

It is not important how much money you have in your wallet, but what kind of money you have! If most of your purchases are using a credit card, then you should consider whether that is the best way to spend your money.

Using a credit card means you will be paying interest on top of the cost of the item. This can quickly add up and hurt your finances.

It’s better to invest in items online or through cash apps than via credit card because it will help you keep control over your spending. You will also get points towards future rewards when you pay off all of your debt.

Tips: Only use credit cards for essential things such as groceries, shopping trips, and monthly bills. Avoid using credit cards if you can’t handle having them.

Check your credit report

Building a Strong Credit Score

It’s always a good idea to check your own personal credit reports, as well as those of potential lenders. You can get your free annual credit reports from all three major bureaus — Experian, Equifax, and TransUnion.

Just make sure you do it from an official source so you know what information you are looking at and what conclusions you should draw.

Some things to look for include:

Itemized explanations for negative items

Whether there is proof of income

Who prepared the documents

You may be able to confirm identity through pictures or statements

It’s also important to remember that even if you don’t see anything obviously wrong, fake accounts or fraudulent activity can hurt your score. If you find something questionable, contact the lender immediately.

And while some errors might go away on their own, others won’t. That could cost you money in future loans or rewards programs.

Pay more than the minimum payment

Building a Strong Credit Score

The next thing you will want to do is pay more than the minimum amount due for each of your credit cards. This sounds crazy, but it can help you increase your credit score!

By paying more than the minimum balance, you are actually spending money in the long run by investing in better credit.

You’ll be eating food at restaurants more often because you’ll have enough cash to dine out regularly. You will spend less money on transportation since you’ll be using the card to make purchases. And you will invest in products and services that keep your accounts up-to-date and accurate.

In fact, the average person spends about $1,000 per year just because they use their credit card frequently. By investing in yourself, you’re giving yourself a leg up in terms of self-improvement.

Invest in a credit repair plan

Building a Strong Credit Score

The best way to restore your credit is by investing in a full service credit repair plan. Most major national organizations offer their services for free, but it is important to do your research and determine which one is right for you.

Some of these companies will advertise that they can get your credit back within 30 days, even though this has never been done before. This is because they use the tools and strategies that work for people with bad credit just like you!

Beware of companies that guarantee results or give you quick fixes such as asking creditors to re-examine your credit reports or offering instant loans. These things cannot happen unless you are able to prove you have made every effort to improve your credit yourself first.

In fact, according to an OCCI study, more than half of all professional credit counseling agencies failed to achieve success long term.

Use the credit card points you have

Building a Strong Credit Score

The next step in building your strong credit is to use what you have already earned! Many lenders look at how well you handle credit cards as an indication of whether or not you will pay bills on time.

If you need more credit card points, you can always apply for new accounts. But using your current account(s) wisely can help boost your credit score.

You should make sure that you are spending within your means. You can do this by having a clear understanding of how much money you have per month and comparing it to what else people with similar income levels spend.

There are many ways to manage your credit card rewards and benefits, but one of the best is to only add cards that fit into your lifestyle.

This way, you’re not giving yourself unneeded perks that cost extra money every month.

Get a secured credit card

Building a Strong Credit Score

The next step in building your credit score is to get a credit card. It’s best to choose a low-limit, no-fee plastic card that does not require an initial security deposit or recurring monthly payments as soon as possible.

A secured credit card requires you to put up some money as collateral (security) for the card. This can be done through a lender that will evaluate your creditworthiness with or without knowledge of the additional security.

You can use the funds from the loan to purchase items for the card, which usually has much lower minimum spending requirements than what would be allowed using only the card itself. These cards are also referred to as “cash back” reward cards because they often offer one or more rewards programs.

Additional benefits of having a credit card include access to credit lines and credit limits that may otherwise be out of reach due to lack of credit history. Many people start off by taking just such a step before moving onto other types of credit.

Pay more than the minimum payment

Building a Strong Credit Score

The next thing you will want to do is begin paying your bills with more money than what is required for the minimum balance. This is calledpayingmorethantheminimumpayment.

This seems crazy at first, but it works!

Most credit card companies calculate your monthly debt repayment by taking all of your current debts and adding up how much you are obligated per month. They then determine the average of that amount and add this to the minimum payment needed to clear the account.

The result is that even if you make the smallest payment every time, most of your money goes toward the interest instead of clearing the account. By paying more than the minimum payment, you are able to use these funds to pay down other accounts or repayments in order to lower your overall cost.

Many people think that they can only maximize their credit score by making the absolute highest payments possible, but this isn’t true. Luckily, there are ways to increase your credit limit without needing a lot of extra cash upfront. We will discuss these strategies later in this article.

By creating an habit of paying more than the minimum each month, you will start seeing improvements in both your credit scores and our financial situation as a whole.


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