My general philosophy when it comes to real estate investing is that the credit score isn’t as big of a deal as people make it out to be. If you’re holding back on reaching your real estate goals because of a credit score, I think that’s a huge mistake. There are so many ways to work around a low credit score.
However, it’s true that a higher credit score can benefit you in a number of ways. The higher your score, the easier it is to qualify for loans and get access to the best rates and terms. If you’re looking to improve your credit score, this episode is for you. You’re going to learn about five specific ways you can boost your score!
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- First up, make sure you’re paying all your bills on time. This should be a given, but your payment history makes up a large portion of your credit score. Recent and frequent late payments will ding your score, so make sure you’re not missing any due dates. If this is a pain point for you, you’ll need to put together some sort of calendar or system to keep you on track.
- Educate yourself about the components of a credit score, as well as the details on your specific credit report. Do you know which factors and measurements impact your score? If not, you need to set aside some time to educate yourself. Listen, can I give you some tough love? Nobody is going to do this for you. Your financial education is up to you and you alone. If you’re serious about making a change, you must invest some time and energy into learning. It’s time to take the initiative. There are many ways to keep on top of your credit report, but no matter how you do it, you’ll want to review it to ensure all of your information is correct.
- Get serious about tackling credit card debt. If you have a lot of debt, you’ll need to work on paying it down to improve your score. The key factors to consider are the number of cards you have, as well as any that are maxed out. If you’re going to carry balances on your credit cards, you’ll want to aim for credit utilization less than 20-30%.
- Be strategic. Next, you’re going to have to take a personalized approach. There may be some specific steps that you can take. Can you consolidate some of your debts on a card with an introductory interest rate to pay them down faster? Would it be helpful to try and raise your credit limit to get your credit utilization down? Again, this is going to be an individualized process – but this is where building your financial education comes in.
- Measure your progress regularly. Like any other aspiration, you’re going to have to keep on top of your progress. Stay up to date with what’s changing on your credit report, and how you can influence it in a positive way. Consistency is key!
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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