4 Quick Tips to Improving Your Credit

With another year behind us – and another yet ahead, you’re probably reviewing all your New Year’s Resolutions and planning just how different this year will be from all of the rest. And if you’re not sure what resolutions to focus on or which ones you’ll be able to actually stick to, let me make a simple suggestion. Let this be the year you focus on improving your credit!Improve CreditThere are five elements that are considered when calculating your credit score. The actual calculations that create that one number score are considered proprietary information. You’d have better luck getting Colonel Sanders to give you his secret recipe for KFC chicken than getting someone to explain to you how these formulas work (and he’s been dead since 1980). But improving your credit doesn’t have to be rocket science. Here are four quick tips on how to make your credit score climb.

  1. Don’t apply for new accounts: It seems every where you turn there’s someone tempting you to fill out a credit application for some credit card for a “free duffel bag” or a 15% discount on any purchase you make “today.” Don’t fall prey to these schemes. If you’re in a position where you’re making good progress on your debt-elimination plan, this will only set you back. And your credit score will take a hit because that “new offer” will result in a voluntary inquiry on your credit report. If your credit is currently “on hold” because you’re using a third party debt service provider to help you through some rough times, then you’ll most likely be declined…so why bother. Trust me…you don’t need that “free towel” that bad.
  2. Make your payments: OK…sometimes this part isn’t that easy. In fact, sometimes it’s impossible. Many just flat out can’t make those payments for one reason or another. That’s OK. If you have a handful of credit cards or unsecured debts that you can’t make regular payments on, just keep making payments on the debts you can. Maybe you have a car payment or two; or even a mortgage payment. You also most likely have other bills you’re paying like utilities and cable. Payment history is 35% of your score and if you’re unable to make payments on all of your debts, making timely payments on those you can is helpful. There are even some mortgage products that only look at your last 12 months of mortgage payments and ignore all other payments. Just keep doing what you can, it will help.
  3. Don’t make wasteful or unnecessary purchases: Many offers don’t involve credit applications but offer “easy pay” or “same as cash” payments in an attempt to make that purchase seem more appealing and “easy to afford.” Don’t waste your money. That’s money that should be used for your debt elimination plan. If you can’t pay cash for that purchase now…then you really have to ask yourself if this is a “need” or a “want” – and be honest with yourself. I’m sure you’ll be surprised with the answer to the question “Do I REALLY need this?” What you really need is to be debt free.
  4. Stick to your plan: While there are some “tricks” you can employ to increase your credit score, sticking to your debt-elimination plan is the easiest way to get your score to climb without having to get sophisticated. Once you’re out of debt, and I mean completely out of debt, there are some simple things you can do to “manipulate” the system. However, none of those techniques compare to the power of being completely debt free.

Even today with talk of a new “scoring system” on the horizon, the elements that make up the current scoring model will – for the most part – play a significant role far into the future. And the five elements that make up today’s scoring system which are your payment history; amounts owed; length of credit history; new credit lines; and types of credit used are all – to some degree – positively impacted either directly or indirectly by the successful use of the Debt-Free Millionaire plan.

Just remember, you only need credit when you don’t have cash. Which would you prefer to have? I don’t know about you…but I like cash over credit any day.


  • Weston J. Briggs

    Reply Reply May 19, 2013

    If you’re like many Americans whose retirement savings took a major hit?during the market meltdown a few years ago, you’re probably wondering if you’ll ever be able to retire. The eye-popping stock market drop in early August and the downgrade of the U.S. credit rating no doubt add to your jitters. Or maybe investment performance isn’t your major worry. A spate of unemployment or depressed home values can make yesterday’s vision of retirement seem like an im­possible dream.

  • Tania Duffy

    Reply Reply June 3, 2013

    Previous Residence? Zero to five years, some creditors only go to three years. Then score zero points. You move around too much! Over five years? Good. Score one point.

  • Erwin Horton

    Reply Reply June 24, 2013

    There is only one legitimate website to get your free annual credit report and it is http://www.annualcreditreport.com . Beware of ads or other websites that offer a free annual credit report. Many of these are scams or they are trying to sell you something. At http://www.annualcreditreport.com , you can request a free credit report once every 12 months. This credit report does not include your credit score, but you can purchase your credit score by contacting one of the three credit reporting agencies (Equifax, Experian or TransUnion). Another great resource for credit reports is http://www.myfico.com , where you can purchase your credit report from all three agencies, including your credit score. myFICO also has an education section where you can learn more about your credit reports and score. You should check your credit report annually for errors and/or fraud. Did you find this article helpful? If so, please check out our free ‘Boost Your Credit Score in Five Easy Steps’ ecourse!

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