7 Tips To Help You Repair Your Credit

At OMG WOW HQ we focus on creating valuable content that fits into one of our five FRESH pillars. Those pillars include: finance, relationships, entrepreneurship, spirituality and health. Every Tuesday we take to Instagram Live with finance expert and coach, @jacquelinechildressmitchell to discuss different topics that our followers email us weekly and common questions asked among our community.

By popular demand, this week we are discussing the importance of good credit, and 7 tips to help you repair your credit. If you want to buy a house, car, start a business or acquire assets, credit matters. The good news is that no matter where you are in your credit journey, there are ways to improve your FICO (Fair Isaac Corporation) Score.

For those who are not familiar, there are three agencies that collect credit data: Experian, Equifax, and TransUnion. You can monitor your credit, inquiries, personal information and public records on each of these credit bureaus via their website as well as other third party websites. A few resources we recommend are: Credit Karma, My Fico, Experian, TransUnion, to name a few. A FICO Score represents the amount of risk a prospective borrower provides to a lender. Scores range from 300 to 850 and help lenders evaluate a consumer’s creditworthiness.

Unfortunately there is no shortcut to repairing your credit but there are ways to improve it starting today. Here is a list to help you get started:

  1. Write down your goals. Everything starts with visualizing and manifesting.  
  2. Get a copy of your credit report. You can get a free copy from the sites listed above or creditrepair.com
  3. Review your credit. If there is something on your credit that is not accurate dispute it in writing with each credit bureau (there are 3 bureaus) as well as on the website you found the reporting.
  4. Evaluate your debit to credit ratio. The gold standard is to aim for a 10% utilization rate. The average is 30%. Most people use more than 30% which decreases their credit score. Aim to pay off your highest balances and your credit cards with the highest APR first. Once you have paid one credit card in full aim to payoff your other credit cards.
  5. Always pay the minimum balance on all cards prior to or on the date your credit card bill is due. If you can pay more we recommend paying as much as you can on each card monthly.
  6. Call debt collectors and negotiate an abatement of interest, settlement, or a payment plan so you are not in a negative standing.
  7. Only spend what you have allocated for your monthly allowance and can afford to pay off monthly. This will help you pay off debt while avoiding collecting more debt. 

Everyone from credit card issuers and insurance companies, to mortgage lenders and property managers use FICO scores, so it is best to get in the habit of paying off your debt and building your credit. Most lenders prefer longevity when considering your for a loan so make sure to pay off your debt and credit cards monthly and maintain credit history for a long period of time. While there is no perfect number of credit cards to have open at one time, credit bureaus suggest that five or more accounts — which can be a mix of cards and loans — is a reasonable number to build toward over time. If you are just starting out or have a lower FICO score we suggest opening a Self account as well as boosting your credit with utility bills, etc., on Experian Boost.

It is a commitment to maintain a good credit score and healthy financial practices that will help you build credit over time so you can acquire more assets, but these tools are a good place to start repairing your credit. No matter what age you are, credit is one of the most valuable investments you can make into your future.

We would love to hear your thoughts, stories, and experiences with credit in the comments below. If there is anything you would like us to discuss on our next blog post, IG Live, or you are interested in joining our free mentorship program, leave us a comment below or email us at: info@omgwowhq.org. We’ve got you!

  1. Brenda says:

    This topic is essential to the wealth of every African American household be it married or single . In order for our generational wealth to continue we must teach our children, and children’s children the do’s and don’ts of having and keeoing money. You can never start to soon. Thanks for sharing.

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