5 Strategic Steps to Take to Substantially Raise Your Credit Score

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As we can see in the below video, credit scores are essential to ensuring you can get loans in the future.  Without a good credit score, there is no way that banks will trust you to give you a loan of any kind.  You can tell them you’ll pay them back, just like a school student can say they are a straight-A-student, but without looking at the student’s grades, there is no substance to his/her claim.  A credit score gives banks the hard facts they need to say they can trust you with a loan.

Source: Credit Karma

Keeping a high credit score is paramount to a healthy and stable financial future.  Here are some ways you can improve that credit score, because every effort to this end counts!

Step 1

Before opening new credit card accounts, make sure to consider the below pros and cons of doing so and make sure your credit score is at a good enough place to handle opening a new line of credit.

Erica Hill Keller Williams Improve Credit Score

Source: John S Kiernan of WalletHub

Step 2

Sign up for and use about four credit cards throughout any given month.  John S Kiernan, Senior Writer & Editor and WalletHub, shares, “The average credit card user had 3.7 cards in 2014, according to Gallup, and WalletHub’s editors believe that around four cards is indeed the number that provides the most benefit without making life overly-complex.”

Step 3

Reduce spending beyond the recommended 30% of your line of credit each month by capitalizing on your credit cards’ rewards programs.  To capitalize off of your diverse credit card portfolio and further reduce the amount of spending you do on each credit card, meet with or talk to someone at the company that each credit card belongs to in order to figure out what rewards each card offers.  These rewards can change, depending on the type of purchase or time of the week, month, or year.  Keep a record of when various rewards come into play for each rewards card, and use that card when it is most financially beneficial for you.

Step 4

Get each of your credit card companies to send you an alert when you’ve almost used 30% of your line of credit each month.  Then, switch to the next credit card until you reach 30% of usage on that card, and so on and so forth.

Step 5

Pay off your credit card balance multiple times throughout a month.  One way to do this is to set a calendar reminder on your phone, tablet, laptop, or desktop to go off at the same time each week.  Oftentimes, this day of the week can be Sunday, when some people take time to prepare for the work week ahead.  For example, set a calendar event called, “Pay Credit Card Balances,” with two email reminders–one that sends you an email one day before the calendar event and one that sends you an email one hour before you scheduled yourself to pay your credit card balances.  This will keep this task on your mind each week without forcing you to remember it on your own.  Use this article to help you determine when to pay off your balances in a way that best affects your credit score.

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9 Solutions to Crippling Personal Finance Issues

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There are endless financial troubles people face when deciding how to allocate their money. Knowing what these problems are will allow you to put them under a light, so to speak, and see exactly what they are and how they work. Once you realize what your problems are, you can start to seek specific and powerful solutions. Below, find some truly crippling financial problems people face daily and how you can go about solving them.

1. Living Paycheck to Paycheck
The statistics are staggering. According to Angela Johnson of CNN Money, “Roughly three-quarters, [or 76%,] of Americans are living paycheck-to-paycheck, with little to no emergency savings,” for things such as job losses or medical emergencies. These types of negative situations can be avoided with some basic financial management tools, such as budgeting and investing, which I will speak more on later.

2. Having Too Much Debt
Erika Rawes from USA Today states, “The average household’s credit card debt exceeds $7,000, according to Nerd Wallet.” With ever increasing, compounding interest rates, people can be crippled by credit card debt. For people with any credit card debt, it is important to live by this rule, “Do not spend money that you do not have.”

3. Having No Budget to Work Off Of
Budgeting can be overwhelming for people, as it takes a lot of time and thought to create a successful one. Oftentimes, people have no idea how to begin a budget or know what resources to use. Take a look at these budgeting softwares or these apps for you smartphone.

4. Poorly Investing and Overspending
People have a difficult time living according to a budget. When using a credit or debit card, it is easier to overspend than when you are using cold hard cash. This doesn’t mean that we can only use cash to make purchases; however, even when people create a budget to live by, they still have a difficult time following through. It is important to get the assistance of someone you can trust to help you make purchasing and investing choices moving forward if changing your habits is not your strong suit.

5. Focusing Too Heavily on the Present
Rawes further states that “According to a Federal Reserve survey release from earlier this year, ‘Thirty-one percent of non-retired respondents reported having no retirement savings or pension, including 19% of those ages 55 to 64,’” and 40% said not saving was their most monumental financial issue. About 25% of those same people from that Federal Reserve survey stated that they have not started thinking about saving for their retirement whatsoever.

Focusing on the present is imperative for getting things done, but it is vital to focus on the future in order to plan for proper action. Creating a budget that allows for you to not only spend but save will allow you to start saving for your retirement. I also recommend making some investments that can help earn you more money as the years go by so that you can have even more money than you earned originally set aside for your retirement. Find out more information here on that topic.

6. Families/Partners Don’t Discuss Income and Expenses
When only one person in a family/partnership knows where the money goes and comes from, it can be difficult to keep to a budget. When expectations are not set by facts, one can lack the knowledge necessary to make financially safe purchases and investments. Having a monthly or even bi-weekly meeting about all profits and losses within a family unit or partnership can keep everyone from making poor financial choices.

7. Emergencies Aren’t Planned For
If someone who earns any money for the home suddenly goes on disability or passes, this can very heavily impact the stability and financial safety of a home. It is important to go over life insurance and disability resources you have at the company you work for before emergencies happen.

8. Children Aren’t Trained to Understand Finances
A child’s ability to learn is like a sponge soaking up water. It is important to teach children early on how to manage money. There are piggy banks that split the jar into four categories of money management. These can help children to learn basic financial wisdom at a young age.

9. Poorly Used Benefits
Oftentimes, companies have an array of different benefits available for employees. These can include things such as commuter financial assistance, free books and lectures, and free tickets to certain entertainment venues. All one has to do in order to take advantage of and find these great benefits is to review what you believe you have in benefits with your Human Resource Director. Ask any and all questions that you have. That is what they are there for!

What financial issues do you face? What solutions have proven helpful for you? Tweet me @EricaHill_KW with your thoughts and questions!