I broke into the 800s!!!
A few months ago I was a little bummed when my credit score dropped because my TJMaxx credit card closed due to inactivity 🙈
But I have had a simple method I have been utilizing that has helped my credit score since I was 18! While loans such as car loans can definitely help it is not necessary. (You should never get a car loan just to build your credit score when it’s possible to pay cash for a cheaper car within your means.)
All I have done is keep a running balance on my credit card but never pay it late! For example: if I have a $5,000 balance on my credit card I look up to see exactly what portion is part of the next due date and ONLY pay that.
To break it down better: If my credit card currently shows I ow $5000 but my statement balance due 09/15 is $3000 I will only pay the $3000 and leave the $2000 on the card until the next due date or I have spent more money.
The logic behind this is that I am showing I can carry debt and still have a good payment history.
#biweeklybudget #howmuchispend #budgetwithme #moneyapps #moneyhacks
Improving your credit score to the 800s is a fantastic achievement and showcases strong financial management. One of the key factors contributing to a high credit score is credit utilization — the percentage of your available credit you're using. As noted, maintaining a credit card utilization rate around 6%, which is well below the recommended 30%, can positively impact your credit rating. Another vital aspect is your payment history. Paying at least the statement balance by the due date consistently ensures a 100% on-time payment record, which is the most significant factor affecting your score. This demonstrates to credit bureaus that you’re responsible with credit and reliable when it comes to repayment. Carrying a balance strategically, as you mentioned, shows that you can manage debt without defaulting or missing payments. Rather than paying off the entire balance early, paying the statement amount allows you to maintain a credit history that reflects active usage and timely repayment. This method signals to lenders that you use credit but aren’t overextending yourself. It’s also important to keep an eye on any changes reported by credit bureaus, like those from TransUnion, that can influence your score. Positive changes, such as improved credit card usage factors or reduced balances, can contribute to gradual score increases. Furthermore, avoiding unnecessary loans solely to build credit is wise, especially when cash purchases fit your budget. Loans can help build credit, but only if they align with your financial plans and repayment capacity. Lastly, using budgeting strategies like a biweekly budget and monitoring spending with money apps can enhance your overall financial discipline, indirectly supporting your credit health. By combining responsible credit usage, timely payments, and smart budgeting, you can maintain and even improve an excellent credit score over time.
