With the cost of living on the rise, purchasing a house of your own can seem like a daunting goal to reach. Juggling the different responsibilities that arise in adulthood can create financial stress and for many, the casualty of such problems can result in a less than desirable credit score.

The great news is that even with a low credit score, your dream of homeownership is still possible.

Read on to learn the ins and outs of buying a home with a low credit score and tips on how to get your credit score in great shape.

Why Your Credit Score Matters

The importance of your credit score for making major purchases has always been surrounded with misleading information. However, for decades the general consensus was that a low credit score was not acceptable for the approval of loans and mortgages. Banks are quite cautious when providing loans and the qualifications can be very stringent for those who are working with lower credit score numbers.

One way banks protect their investment through a loan is by implementing a higher interest rate.  The lower your credit score the higher your interest rate can be, and even one percent higher can cost you thousands of dollars more.

Also, a lower credit score can result in more restrictions, qualification requirements, and a tougher underwriting process. A few common necessities for those with lower credit scores are a higher down payment amount, lower debt-to-income ratios, and having a co-signer.

With all of these factors having a higher credit score can not only save you money but also stress and headaches.

Related: Credit Cards Are Not Evil: Don’t Make These Common Credit Card Mistakes

Lenders and The Pre-Approval Process

There are several options available to you for getting the mortgage loan you desire and these options are well worth looking into when your credit score is low.

A Federal Housing Association (FHA) loan is a government-assisted loan provided through the Department of Housing and Urban Development (HUD) and is a flexible selection for those who have low credit scores.

FHA loans offer two tiers of requirements that are dependent on your credit score. The 2018 eligible credit score is as low as 500 and those with a credit score between 500 and 579 must provide a minimum down payment of 10 percent.  For those who have a credit score of 580 or higher a down payment as low as 3.5 percent is offered.

Scores that are lower than 500 are generally ineligible for an FHA loan, however, there may be exceptions to the rule based on differing circumstances. One thing to keep in mind is the mandatory mortgage insurance that is applied to an FHA loan as the down payment is less than 20 percent.

Aside from a government loan, private mortgages can be a viable option when you are unable to obtain a mortgage through traditional methods such as the bank. There are several companies that routinely work with low credit score mortgage seekers. Carrington Mortgage Services, Quicken Loans, CitiMortgage, HomeBridge Financial Services, Wells Fargo, and Rocket Mortgage by Quicken Loans are a few nationwide options.

Getting a mortgage pre-approved is a great time and stress saver and is very important when you begin your home buying process. A mortgage pre-approval shows you one of two things: that you are not quite ready for the homeownership process or that you are ready and able to buy.

Getting a mortgage pre-approved is a quick and easy process as your credit history and score are pulled from all three nationally recognized credit reporting companies: Equifax, Experian, and TransUnion. Once the data has been analyzed, you will see the loan amount that you qualify for which will help you look at houses that are in your price range more effectively.

After pre-approval, you can then move on to house shopping and selection, putting in an official mortgage loan application, waiting for the loan processing and underwriting and if your loan is approved, the closing takes place.

Some things to remember:

• A mortgage pre-qualification is not the same as a mortgage pre-approval. A mortgage pre-qualification assesses your debt-to-income ratio whereas a mortgage pre-approval requires detailed information about your income, assets, and debt that will be reviewed by the lender’s underwriters.
• It is important to be mindful of the information you receive from the pre-approval process and really process it for your unique situation. Is this really the best time for you to buy? Can you save more, build your credit score, and get a better rate down the road? How much will the loan rate cost you over the course of its term? These are all things to consider when you are on your journey.

How to Increase Your Credit Score

So, you know why your credit score is extremely important in your home buying journey, but you may be asking how you can make your credit score better than it is.

The first way is by knowing what your credit score and credit history is at each of the three credit agencies. While they each have their own scale and your credit score number may vary from one to the next, having all three numbers can be a helpful starting point on the way to the top.

Request a free credit report annually from each agency to help you strengthen your financial homeownership plan. The report won’t have your credit score but it will contain a detailed breakdown of your credit history and show you how each company rates your use of credit. This very important information can also help you see if there are any discrepancies and/or misreporting that are harmful to your score level.

Related: Credit Card Debt Consolidation: The Way to Go

How to Prepare Your Credit to Buy a House

For your credit score, there are easy and free ways to obtain that number online. Credit Sesame and Credit Karma are two sites that offer free credit score updates to help keep you on track.

To help improve your credit score before you begin applying for a home mortgage, try these methods:

Do not miss a bill payment and pay your bills on time

Lenders like to see someone who is consistent and timely with their financial responsibilities. Setting up automated payments can be helpful to make sure you don’t miss a payment.

Reduce your credit card use to less than 30% of your limit

Maxing out your credit card or using a high percentage of it consistently without paying it off in full shows that you lack control in using your credit. This is an alarm bell for lenders. Using 30% or less of your credit card limit and paying it off in full shows that you are responsible.

Pay off any outstanding debt

Your debt-to-income ratio will be reviewed during your home buying journey and the lower your debt amount the better. Budgeting and making extra money through a side hustle can help you get rid of your debt once and for all.

Remember, your credit score dictates your buying power so taking the necessary steps to increase your score will be well worth it in the grand scheme of things.

Following these tips will help put you on the right track to homeownership even with a low credit score. Remember that purchasing a house is not out of reach with the right strategy. Taking initiative and doing your research to ensure you are in the best standing possible before you apply for a mortgage loan is going to help make your journey a smoother one.

Are you looking to buy a house? Have you started working on improving your credit yet?

The post Can You Buy a House With a Low Credit Score? first appeared on My Debt Epiphany.

The post Can You Buy a House With a Low Credit Score? appeared first on My Debt Epiphany.

While your credit score isn’t the most important aspect of your financial profile, it should not be ignored.

As a teenager, I never really understood the concept of credit and how to build up my score properly. Before I even turned 18, I unknowingly had a bad remark on my credit report after the balance from one of my bank accounts was sent to collections. I made an honest mistake but had to pay the price.

When I moved out of my parent’s house at 20 and tried to get an apartment and furniture, my bad credit came to haunt me. It sucked. As a low-income college student, I didn’t have a lot of money to pay for everything in cash and I desperately wanted to improve my score.

Some people in the personal finance niche will argue that credit is irrelevant since it promotes the act of borrowing money and getting into debt. While this is understandable and I don’t encourage people to borrow money to inflate their lifestyle or take out loans they can’t pay back, credit is apart of our society and it can’t always be completely ignored.

If you have dreams of buying a house or need a new car if yours suddenly breaks down and you need to get to work, the first step should be to rely on your savings funds, but as a backup, you may have to utilize credit.

So What Are the Perks of Having a Great Credit Score?

• Better chances of getting approved for a quality credit card
• Lower interest rates for personal loans and mortgages
• Easier approval for rental houses and apartments
• Easier to get a cell phone contract
• Better car insurance rates

Related Post: Credit Cards Are Not Evil: Don’t Make These Common Credit Card Mistakes

These benefits are at your disposal when your credit score is above average. Should you take out loans every month and open 20 credit card accounts? No, but the option to borrow is there should you ever need it.

Over time, I’ve been able to rebuild my horrible credit score by about 150 points. That’s huge, seeing as how my credit score was pretty pathetic a few years ago and now I could demand the lowest interest rates on a mortgage if I wanted to.

It took me some time to get to this point though. If you’ve made mistakes that have negatively impacted your credit in the past, anyone promising to help you improve your credit overnight is probably not being 100% truthful because it takes time.

If you’re looking for a real solution to building up your credit score, consider taking the following steps.

Check Your Credit Score and Report

Before you start building or rebuilding your credit, you need to know where you stand first so you must check your credit score. You can do this online for free using sites like Credit Sesame. This is the site I used to get my credit score back on track and I’ve written about the benefits of using this free platform as well.

Credit Sesame not only shares your credit score and report with you, but they also provide you with helpful information like your total debt amount, your debt to income ratio, and a credit analysis along with tools like identity theft protection, and goal-setting assistance so you can take active steps toward improving your score.

You can also check out your entire credit report for free once a year by visiting annualcreditreport.com.

Related Article: Free Credit Tools You Don’t Want to Miss Out On

How to Check Your Credit For Free

Figure Out Which Area of Your Credit Profile You Need to Improve

Your credit score is determined by a variety of factors and those include:

Payment History – 35% of score

Credit Utilization – 30% of score

Length of Credit History – 15% of score

New Credit – 10%

Mix of Credit Accounts (how diversified your accounts are ie. student loans, mortgage, credit cards, auto loan) – 10%

Ideally, you should work on improving all factors that contribute to your credit score but some are more important than others. For instance, you can’t really do anything about the length of your credit history aside from waiting for time to go by.

You can however, make sure you pay all your bills and account payments on time and keep a low utilization on your credit cards.

Pay Down Your Debt

Paying down your debt can boost your credit score big time. When I took out a car loan, I didn’t want to do it but I prioritized paying it down and that boosted my credit score. If you have been carrying any balances, be sure to pay them down which may also allow you to save money in interest too.

Now with credit, there is a catch 22 since the system likes you to continue making payments on various different accounts each month because it builds up your payment history. What happens when you pay some of your debt off and close your account?

The credit system doesn’t like that as much as your score may go down a few points but it might not be anything major. Plus, the debt you had will be gone so you should feel good about that. Paying off debt like student loans and car loans is a great way to boost your credit score and improve your finances but it’s not the best way to build your credit history because once you close those accounts, your payment history might disappear after a while.

Yet and still, I’m speaking for myself that I paid off quite a bit of debt over the past two years and I’ve seen my score improve overall even though it might have dipped a few points.

Start With a Secured Credit Card and Keep Your Utilization Low

If you’re trying to rebuild your score so you can have awesome credit, you can try getting a secured credit card and keeping the utilization low. Secured credit cards are backed by a cash deposit you make upfront. The deposit amount is usually the same as your credit limit. For example, you might have to pay $300 upfront to have a $300 credit limit with a secured credit card.

With a traditional credit card, you are offered a limit and you may spend up to that limit.

No matter what your limit is, it’s important to realize you should never utilize more than 30% of it. If you have a credit card with a limit of $1,000, you should never spend more than $300 per month.

To be safe, I usually never utilize more than 20%. Credit cards should be used as a tool to improve your score and not free money.

Therefore, lenders like it when you don’t utilize all of your credit limit because it demonstrates that you’re not dependent on the use of your credit card. If you are worried about your spending and the possibility of getting into debt, you may not want to get a credit card and that’s understandable.

For me, I just play the game. I keep my utilization super low (usually between 5-10%) and I just use my credit cards for regular expenses I would usually pay for like gas, groceries, etc. and sometimes I even attach a small monthly bill like for our Hulu subscription service so I can pay it when I pay off my credit card each month and build up a positive payment history.

I don’t even use some of my credit cards each which gives me a 0% utilization rate but my score still climbs just the same. If you’re going to use a credit card as a tool to improve your credit score, keep it simple, maintain a low utilization, and pay your balance off in full each month.

Make Sure Inquiries Are Removed After 2 Years

Another factor that could be negatively impacting your credit score is inquiries. Soft inquiries (like a current creditor pulling your score to offer you a promotion) don’t affect your credit but hard inquiries (like if you applied for an auto loan and they ran your credit) can leave a lasting impact.

It’s important to keep the amount of inquiries you have to a minimum and make sure everything falls off your credit report within 2 years or less. If inquiries don’t fall off within two years, you’ll need to pull up your full credit report and contact the creditor personally to request they remove the inquiry ASAP. Here is some detailed information about requesting to have credit inquiries removed for your score.

Finally, Be Patient

These are all the things I did to increase my credit score by 150 points but like I said the process took time so the best thing you can do after taking all these steps is to be patient. Awesome credit isn’t built overnight but if you stay persistent you’ll see the same improvement as well.

My Favorite Resources

CreditSesame– My go-to tool to check and monitor my credit for free.

Policy Genius – This free resource is what I used to compare quotes and settle on an affordable term life insurance policy.

LendUdu – Free online marketplace for student loan refinancing. Shop around for better student loan rates without hurting your credit

Survey Junkie – Earn money taking surveys online

Opinion Outpost – Another legit survey company I like. My husband uses this site to earn extra money we can spend on dining out

CapitalOne 360 – My favorite high-yield online savings account. Earn $25 when you open an account.

The post I Raised My Credit Score By 150 Points, Here’s How first appeared on My Debt Epiphany.

The post I Raised My Credit Score By 150 Points, Here’s How appeared first on My Debt Epiphany.

While having the use of credit is handy for many purchases and even in a pinch, it is extremely important to manage it well so that your credit score isn’t poorly affected.

Whether you’re interested in learning ways to keep your credit score healthy or raise it from the dead, this article will provide you with useful information and tips to help you generate a better credit score.

Credit: What It Is And Why It’s Important

Credit scores became a staple of the modern financial landscape in 1989 and evolved into the FICO score, which is recognized today as the most popular credit scoring model in the U.S.

Your credit score is simply a track record of your payment history with all sources of credit such as revolving credit  (credit cards), installment credit (loans), and open credit which is rarer than the other two and is usually connected to charge cards (not to be confused with credit cards).

There are three major credit bureaus that provide reports on your credit score: Equifax, Experian, and TransUnion. While they each have a slightly different method of determining your individual score they do all take into account similar aspects for deciding your points level.

The breakdown of how your credit score is calculated is usually kept under wraps by credit bureaus but MyFico provides a general idea:

• 35% is based on your payment history
• 30% is based on the amount you currently owe
• 15% is based on the length of your credit history
• 10% is based on new credit you are approved for
• 10% is based on the types of credit you use

Of course, late payments, abuse of credit such as constant refinancing, buying things you know you can’t afford at the moment and hopping around from credit card to credit card through balance transfers can also play a factor in determining your credit score.

A healthy credit score is important for many reasons but the biggest one is it determines your risk level for lenders, which can make or break you when it comes to the interest amount you have to pay them.

How to Get A Better Credit Score

When it comes to building your credit score, it takes time and consistency just like anything else worthwhile. These points below provide great insight into how you can obtain a better credit score.

Related: I Raised My Credit Score By 150 Points, Here’s How 

Check Your Credit Score Regularly

It is essential that you start from the beginning and find out your current credit score number. Once you are aware of this you can truly begin to make the necessary changes.

A great tool to help you get your credit score in check even faster is by utilizing free online credit score services such as Credit Sesame and Credit Karma.

Credit Sesame provides monthly updates on your TransUnion credit score as well as provides great savings tips and information to help you bolster your credit score.

You can receive free credit reports (not scores) from Equifax’s and Experian’s websites and I highly recommend you do so. Credit reports are a great way to see your overall payment history and to dive deeper behind the credit score number itself. Also, you can check for any inaccuracies on your credit report that need to be removed.

Learn even more about how to check your credit score online for free to increase your credit score boosting opportunities.

Control Your Spending

It’s no doubt that a poor credit score stems from a lack of responsibility with spending money.

While it isn’t glamorous, budgeting and being mindful of your spending habits will certainly help you to recognize your negative money triggers and create a space for you to improve.

The questions below will help you to figure out your money habits and help you turn them around:

• Do I shop impulsively or feel a compulsion to shop?
• Is shopping a way for me to deal with negative emotions/events in my life?
• Where do I spend my money most and why?
• Do I regularly pay off my debts in full each month or do I carry them over?

If you find that you have an issue with tracking your spending and controlling your money flow, this ultimate budgeting guide and in-depth, complete budget mastery course will help you to create a budget you will love to follow.

Remember, It Is NOT Free Money!

One of the most common pitfalls for credit users is the idea that credit is free money.

The reality is that, just like driving, credit is a privilege, not a right. Be mindful that the portion of credit you use must be paid back and in a timely fashion so your credit score isn’t negatively affected.

Before taking on any credit responsibilities be sure to ask yourself the questions above and of course, “Can I afford this?” Developing a healthy mindset habit is key

Pay With Cash

I’ve said it before and I’ll say it again: cash is king.

When you pay with cash you are ensuring you win the credit game by not playing at all. Cash purchases save you interest and the stress of having debt from using borrowed money.

When interested in paying for an item or service, consider saving up for it to avoid incurring interest and potentially falling behind on your necessary payments.

Pay Off Existing Debt

Paying off existing debt will help boost your credit score if you’ve been behind or have larger balances. If you have balances that are more than 30% of your overall credit limit, paying them down can help raise your score.

Get into the habit of paying yourself first and putting extra toward your debt early in the month, so you don’t have to worry about having enough leftoever after paying expenses.

After a while, this habit will become second nature and you won’t even view any extra money you have as disposable income since it will go straight to debt.

Related: 4 Books To Start Reading If You Want to Get Out Of Debt

How My Husband and I Paid Off $14,354.81 of Debt This Year

Start Living More Frugally

Debt is a huge factor that can have a negative impact on your credit score. People often get into debt by spending more than they earn and living beyond their means. If you adopt a frugal lifestyle, you’ll learn how to live well on less and won’t feel the temptation of wanting to borrow money and accumulate debt.

Related: 12 Frugal Hacks You Can Use to Start Saving Thousands

Frugal Meal Ideas That Are Easy to Prep

How to Save Money in Almost Every Area of Your Life

When it comes to building your credit score, consistency and patience will help you win. Be sure to respect the importance of your credit score by using your credit responsibly.

How have you maintained or raised your credit score? What was the biggest challenge you have encountered regarding your credit score journey?

The post 6 Healthy Habits That Lead To a Better Credit Score first appeared on My Debt Epiphany.

The post 6 Healthy Habits That Lead To a Better Credit Score appeared first on My Debt Epiphany.

When it comes to payment options, none is more popular in today’s society than the use of credit cards. Whether it is in person with a quick tap of a card or online with an even quicker tap of a button, credit cards make it easier than ever when making purchases but what happens when you review your statement and find charges you didn’t make?

The American Banking Association noted that at the end of 2017 there were 364 million open credit cards accounts in the U.S.

In that same year, 25% of American credit card holders filed a complaint with the Consumer Financial Protection Bureau regarding problems with a purchase shown on their statement.

When a credit card charge arises that is not one you have made it can be troubling and the dispute process can be difficult and stressful if you don’t know where to begin.

The information below will help you to file a credit card dispute with ease and get results.

Reasons You May Need To File a Credit Card Dispute

The most common reasons you may need to file a dispute are identified as and recognized by the Fair Credit Billing Act (FCBA) as “billing errors”:

1. A charge for something you already successfully returned
2. A charged for something you never received or accepted
3. Unauthorized charges made on your credit card by an unsanctioned user
4. Mathematical errors (such as an incorrectly entered tip amount by a server or a double charge on your credit card)
5. A charge related to your statement being mailed to the wrong address after you have sent in a change of address form to the company in writing at least 20 days prior to the billing period end
6. A charge without the correct date or price and
7. Any charge where you ask for an explanation or proof of purchase, believe there is an error or need the charge clarified

As you decide to start your credit card dispute journey, these are the top reasons to keep in mind when making a claim.

How To Dispute a Charge

When an incorrect charge hits your bill many things may run through your mind. The first thing to do is to double check that this charge was not one that you simply forgot about making. While this may sound obvious, it happens more often than not and figuring this out from the beginning can save you a lot of hassle and stress.

Once it is confirmed that the charge was not made by you, immediately note if this charge is a fraudulent one. Fraudulent charges are handled differently than unauthorized charges. A fraudulent charge could be a charge on your card from a different state or country than you reside in and it was not made or authorized by you. You should contact your credit card company immediately to report these types of suspicious charges as your personal information could be compromised.

If the charge doesn’t appear to be fraudulent either, there are several routes you can take to make your claim. Here are some non-negotiables to make this process as smooth as possible:

Always Start at the Source

When you have a dispute to make, reaching out to the merchant first to find a resolution is the best idea as most merchants will work with you to make things right. If the merchant will not help you or they are no longer operational, you will then contact your credit card company.

Have Evidence to Back Up Your Claim

When speaking with a merchant and/or dispute claim clerk be sure to document the date, time, name of the person you spoke with and their ID if applicable as well as the comments made during the conversation. Copies of receipts, bank statements, credit card statements, emails, letters and any other documentation related to your claim are all great to help bolster your odds of winning the dispute.

You must pay the amount of your credit card bill that is not being disputed. The creditor may not take any legal or any other form of action regarding the disputed amount against you during the investigation.

For unauthorized uses of your card, the majority of credit card companies will accept a phone call to file your dispute claim. For unauthorized purchases of $50 or less, most credit card companies will provide a refund for those charges although it is not the law to do so.

However, once the amount is over $50, it can become quite difficult to dispute and receive a full chargeback of the funds to your credit card. The sooner you report the charges and provide the documentation necessary, the better.

When you have a billing error related dispute, the Federal Trade Commission (FTC) requires a letter with your name, account number, the dollar amount your disputing and your reason for the dispute. The letter must be mailed to the Billings Inquiry Department of the company within 60 days of you receiving the statement with the noted bill error. Some credit card companies may accept emails instead of a letter so be sure to check the company’s policy.

Once your claim is received and the credit card company has sent you an acknowledgment of your claim within 30 days of receiving it, an investigation that is considered “reasonable” is conducted. This investigation could include analyzing your signature on the credit card slip, comparing where a purchase was made versus where you live and even obtaining a police report.

Next Steps

Afterward, the company has two complete billing cycles or a 90-day period (whichever comes first) to contact you with their decision in writing. If the claim decision is in your favor, the charge and associated interest should be dropped. If the decision is to deny your claim, a written explanation is provided to you and a grace period is normally permitted for the charge unless you disputed it after the grace period.

If the original process does not provide the results you want, or you do not receive a response from the company you can file a formal complaint to the Consumer Financial Protection Bureau (CFPB) or take matters further through taking legal action against the credit card company to enforce your credit card dispute rights.

For more information, visit the FTC’s page here.

When You Shouldn’t Dispute a Charge

There is always another side to an issue and in this case, it is abusing the credit card dispute process. There are many times “friendly fraud”, or an illegitimate chargeback, takes place and this costs U.S. merchants a lot of money each year.

Your “unauthorized purchases” made by relative or friend, your buyer’s remorse or you’re dissatisfaction with a purchase (but haven’t spoken with the merchant yet) are all reasons to think twice about making a disputed charge.

As you use your credit card to make purchases, establishing a routine of regularly checking your statement to ensure that you aren’t paying for fake charges is a great way to take charge of in this area of your financial health. Be sure to review your monthly statement and if you find something that isn’t legitimate on your card then be sure to follow the steps above to find a solution.

Have you ever had to make a credit card dispute claim? If so, how was the process for you? What tips can you share?

The post How To Make a Credit Card Dispute first appeared on My Debt Epiphany.

The post How To Make a Credit Card Dispute appeared first on My Debt Epiphany.

Are you considering applying for a mortgage soon or within the next year? Having just bought a house, I know the process can be tedious and it’s best to start planning in advance if you can’t.

One of the biggest issues that can hold you back from getting a new mortgage is a low credit score. Depending on what type of loan program you’re going for, you could have to meet specific minimum credit score requirements.

Even if you do get approved, having a lower or average credit score can often lead to a higher interest rate which means you’ll pay more on your house over the life of your loan.

If you’re looking to buy a house and your credit score is low, getting credit repair is a solution that will allow you to obtain a mortgage and lock in some of the lowest interest rates on the market.

Here are some key ways to get your credit ready to buy a house.

Start Monitoring Your Credit

You want to start by monitoring your credit so you know exactly what your situation is. Monitoring your credit will allow you to better pinpoint the key factors that have led your score to drop so you can start fixing them.

My husband and I started monitoring our credit for at least two years before we decided to buy a house and it paid off. His credit wasn’t as good as mine but we wanted to be co-borrowers.

I knew that lenders would look at his lower score and factor it into the loan terms so I wanted to make sure we both had great scores.

You may want to request your credit scores and full reports from the three main credit bureaus. You can consistently monitor your credit online and this won’t hurt your score.

Fix Any Discrepancies

As you go through your credit report with a fine tooth comb, you may notice some errors or discrepancies that need to be addressed. It’s better if you catch these errors before mortgage lenders do so if you know you paid off an account but your report says otherwise, for example, you’ll want to make sure that gets updated.

Going through a credit report and filing disputes can seem like a daunting task to some so you can do it yourself or work with a credit repair company like Lexington Law.

This process is super important as you’re on the road to repairing your credit so if you’re not sure how to go about it, definitely consider working with a professional in the industry like Lexington Law.

Pay Off Your Debt

Maybe I’m just a money nerd, but I wanted to have as little debt as possible at the time we bought a house. Sure, we’d be adding more debt with a mortgage, but mortgage debt is the best type of debt in my opinion.

It’s often low interest and you can build equity as your house becomes an asset. Other types of debt like credit card debt, car loans, and student loans often just hold you back from financial success. Plus, the monthly payments eat up your disposable income.

Another important factor when applying for a mortgage is the debt-to-income ratio. Lenders don’t like to see that you have a ton of debt when compared to your income because it makes you look like a risky borrower who may default on your mortgage.

Plus, having high debt balances can just drive your credit score down. One of the easiest ways to boost your credit score quickly is to pay off your existing debt.

When I paid off my car loan and student loans, my credit started climbing and I freed up a lot of money since I didn’t have to make those monthly payments anymore. Choose a debt you want to pay off and throw everything at it. Lower your expenses and increase your income so you can make extra payments. Then, move on to the next account.

This is the strategy we took when my husband paid off his car loan right before we started getting serious about doing a mortgage preapproval. We lived simply and stuck to our budget for a while and he drove for Uber on the side to make extra money to throw towards the debt.

Continue to Pay Your Bills Ontime

You’ll want to get out of the habit of paying bills late if you want to rebuild your credit so you can buy a house. One of the most important factors that contribute to your credit score is payment history.

For regular utility bills or your phone bill, you may not be rewarded for making on-time payments but your credit score will suffer if you start missing payments.

Late or missed payments makes you look unreliable in the eyes of lenders and your score will reflect that. Using a credit card or a small credit builder loan is a great way to build your credit by creating a positive payment history.

You can start with one credit card or a secured card and spend a small amount then pay the bill off in full monthly. Those payments will be reported to the 3 major credit bureaus each month and thus help improve your credit score.

Lie Low and Don’t Apply For New Credit

Once you start to see your credit score improve, you won’t be home free that quickly if you’re trying to buy a house. During the preapproval and application process, you don’t want to apply for new credit or take out any new loans.

Financing a new car or furniture when you’re trying to buy a house is a big NO. The extra inquiries can have a negative effect on your credit and cause confusion among your lender and underwriter who may ask you to provide more paperwork to explain the purchase.

Buying a house can be an exciting milestone but you want to be financially savvy about it. If you’re getting a mortgage, having a great credit score should be a MUST on your requirement list. Keep these steps in mind if you’re looking to repair your credit so you can own a new house you’ll love.

Have you ever had to repair your credit before buying a house? If you’re in the process of doing so, which one of these steps are you focused on now?

The post How to Repair Your Credit to Buy a House first appeared on My Debt Epiphany.

The post How to Repair Your Credit to Buy a House appeared first on My Debt Epiphany.

She overcame low wages early in her career along with being burdened by her debt by implementing some strategies that everyone can use. Most important, you’ll want to know what allowed her to change her mindset and become credit card debt free.

LaTisha “Tish” Styles is a nationally recognized millennial personal finance expert and digital marketing professional. She is the founder of YoungFinances.com and President of Financial Success Media, LLC. Through her signature training programs, LaTisha helps service-based entrepreneurs build a lead generating system to attract new clients. She has been featured in The Economist, quoted in Forbes, and mentioned in U.S. News and World Report as a top personal finance expert to follow on Twitter.

How did you get into debt? What was the first purchase you remember making that contributed to your debt or started the downward spiral?

I had allowed my debt to grow to over $22,000 in credit card debt and I had about $10,000 remaining on a car loan when I decided to pay it all off.

I got my first credit card at the age of 18 and I exchanged my SSN for a free shirt. I had no idea that I would get approved. In fact, I was sure that I wouldn’t get approved. A few weeks later, I got this credit card in the mail and I promised myself that I would be responsible with it.

At first, I paid it off in full each month but then I started to pay less and less. I remember my first purchase was a dress that I bought at Dillard’s. It was on sale for $10. I show the dress in my debt payoff video here.

Related: 7 Reasons Why You Should Avoid Getting a Car Loan

When did you decide your debt was a problem? Did you have an ‘aha moment’ and what triggered it?

I realized that my debt was a problem when I had to turn down a job because the salary was not enough to allow me to handle even my minimum monthly payments. This was after I had gone back to school to get a better degree.

I graduated into the recession and because of the internship that I secured while in school. I immediately received a job offer. But the pay was no better than the full-time retail jobs I had left to improve my education. I felt defeated.

At that moment, I decided that I never wanted to make another decision based on my debt.

Did you implement a specific strategy to start paying off your debt?

Because I did not take that job, I went back to working part-time and jobs here and there to make ends meet. But I was starting to fall behind on my debt. My card accounts became delinquent and I sought help from a consumer credit counseling agency, Clearpoint.

They helped me to create a 3-year plan so pay everything off. I knew that I needed help from a third party because I was falling so far behind and many creditors were threatening legal action.

Related: Best Strategies and Tips to Pay Off Credit Card Debt

How to Increase Your Credit Score By 150 Points

What were some obstacles you were/are faced with? How did you deal with the days when you lost motivation?

Paying off that debt over the span of 3 years was not easy. I put together a budget but I still had a bit of frustration when I saw about $400-$500 from every paycheck going to debt payoff. I started to think about what I could do with that money if I didn’t have debt. That kept me motivated at times.

But then I realized that I needed to include mini-rewards along the way for myself. So I started putting aside $50 per month towards a travel fund. And when it reached $600, I boarded a plane to the Bahamas stay for a day or so and enjoyed a taste of what life would be like after my debt was paid off. That travel fund kept me going.

What motivates you? What would you say to people who think they can’t get out of debt in an attempt to change their mindset?

I’m most motivated by competition. That is one of the main reasons that I enjoy Crossfit. But paying off debt is a personal struggle. I used stories of people who had done it already to help me stay motivated.

I read blogs, listened to podcasts, and imagined how I would tell my story. When I made my YouTube video telling how I had done it, it felt really good. And it made that 3 years all worth it.

Learn More About LaTisha

I’m most active on Facebook and you can find me there at Facebook.com/LaTishaTV. I’m also on Instagram and Twitter @LaTishaStylesTV and if you’d like my one-page budget printable that can help you get out of debt then you can view if here.

The post Debt Mindset Series: Breaking Up With Credit Card Debt first appeared on My Debt Epiphany.

The post Debt Mindset Series: Breaking Up With Credit Card Debt appeared first on My Debt Epiphany.

With over $747 billion of credit card debt across the United States, most Americans know far too well how easy it is to fall into a trap of not being able to pay off their credit cards. Because credit cards give the feeling of “free money,” people tend to spend money they don’t have when they have a credit card handy.

If you’re being crushed by credit card debt, first know that you’re not alone. Unfortunately, the average household spends close to $1,300 a year in credit card interest. But that isn’t the way it needs to be.

Here are some strategies and tips you can implement today to help pay off your credit card debt.

Pay With Cash

If you’re trying to pay off your credit card debt while still using your credit card, you’re only digging your financial grave even deeper. To reduce your debt, you need to stop using your credit cards.

Until you see that credit card balance hit $0, stick to paying with cash as much as you can. While you may think the $5 you charge on your daily bagel and coffee won’t do much damage, that can quickly add up — adding to your credit card balance and the amount of interest you pay each month.

Create a Budget

Having a clear budget helps you stay on track financially. Spending outside of your means is what led to your credit card debt in the first place, so create a budget that ensures you don’t spend more than you have.

Within your budget, create a category for paying off debt. The larger you make this portion, the sooner you’ll be out of debt.

Related: My Budget That Allows Me to Save Half of My Income

Treat Your Payment Like a Bill

While your credit card bill technically is a bill, the minimum you owe is typically only a fraction of the overall amount. When you’re getting by just paying the minimum, you won’t dramatically hurt your credit score, but you can hurt your wallet.

Set an amount much higher than the minimum payment that you will pay each month. Rather than convincing yourself you can pay less this month, treat that payment as you would any other bill. Be sure to pay it in full and on time.

Related: Credit Cards Aren’t Evil: Don’t Make These Common Credit Card Mistakes

Drop the Annual Fees

Credit card companies suck customers in with enticing sign-up fees and premium offers. While they may seem like great offers when you sign up, they’re rarely as good as they sound. These credit cards also typically come with an annual fee (which may be waived for the first year).

With the number of great credit cards on the market, there’s no reason you should be paying to have a credit card — especially if you’re bogged down with credit card debt. If you have credit cards with high annual fees, pay them off and close them down.

Consider Balance Transfers

Paying interest on credit card debt can be one of the biggest reasons why you struggle to pay off your entire balance. When you’re making payments only to be hit with an interest payment, it can seem like you’re never going to become debt-free.

A balance transfer to a credit card with a 0% interest rate can be just the break you need to pay off your debt and get back on track financially. While most cards will charge you a percentage to transfer the balance, that percentage will typically be much lower than the rate you’re being charged each month.

With balance transfers, just be careful because that promotional 0% APR rate is usually only temporary (it may last for 12 months or 22 months for example) and you may be charged interest on purchases even if your transferred balance has a 0% APR which is why you shouldn’t keep spending on your credit card. Most balance transfer offers also expire within 60 days so if you sign up for a new credit card that allows you to transfer your balance from a high-interes card, be sure to set up the transfer as soon as you can so you don’t forget.

Get a Side Hustle

Side hustles are a great way to make some extra money in your spare time that can be used to pay off debt. Many individuals have been turning to the internet to sell products, create courses or perform freelance jobs in the hours after work.

From blogging to running an online marketplace, there are many different options for creating a profitable side hustle. Driving for Uber or Lyft, or delivering for a service like Postmates, can be another great option for making some additional money to pay off your debt.

Related: Simple, Low-Effort Ways to Make Extra Money

How to Become a Freelance Writer

How to Earn Money as a Virtual Assistant

5 Reasons Why You Should Start Driving for Uber

Best Work-From-Home Customer Service

Become a Tutor to Pay Off Debt

Ask for a Lower Interest Rate

If your interest rate is holding you back from paying off your debt, all you need to do is ask your bank to lower it. The interest rate you’re given is contingent on your credit score. If you know that your credit score has improved since you opened the card, ask them to provide you with an updated rate.

While the bank may decline your request, it never hurts to ask. You may be surprised at just how willing they are to help you especially if that means you can pay them back and avoid having to deal with a collection agency or a debt settlement.

Credit card debt can prevent you from reaching your goals financially and may even stop you from living the life you’ve always dreamed of. When you’re swimming in credit card debt, even everyday purchases can make you feel guilty.

When you start tracking your credit score online, you’ll understand the impact that your credit card debt has on your credit and it will motivate you to take action.

Related: How I Raised My Credit Score By 150 Points

When you take the appropriate steps, getting out of credit card debt is possible. Implement a few of these strategies today and you could be surprised at how quickly you can get out of the hole and improve your credit in the process.

Have you ever been in credit card debt? What’s your best strategy for paying it off?

The post Best Strategies and Tips to Crush Credit Card Debt first appeared on My Debt Epiphany.

The post Best Strategies and Tips to Crush Credit Card Debt appeared first on My Debt Epiphany.

When I first started checking and monitoring my credit, I felt pretty confused as there were several websites out there that claimed to show me my credit score and report, plus I had to consider the three main credit bureaus all of which had different scores listed for me.

Before, I reveal the best ways to check your credit for free, I’m going to explain the reasoning why it may seem like you have so many different scores along with how to avoid those sites that claim to offer you a “free” credit score but are really just baiting you to pay a monthly fee.

So, Why Do You Have Different Credit Scores

While you probably know there are three major credit bureaus that include TransUnion, Equifax, and Experian, you may not know that you actually have hundreds of different credit scores. Thus, there’s really no way to track or consider them all.

There are many different formulas and algorithms that dictate what your score is and they are updated constantly which is why what you are able to see may never match what a lender sees exactly. The best thing you can do, is keep working to build your credit to improve your score and track it online using one of the trusted sources below. Use the score you see as a general idea of where you’re at.

Your FICO Score vs. Your Vantage Score

You may have heard the words ‘FICO score’ and ‘Vantage score’ thrown around before, but what do they actually mean? Your FICO score is used more widely among lenders. FICO scores range from 300 – 850. The FICO scoring model has been updated quite a few times and uses slightly stricter standards. Right now, many lenders are using either FICO 8 or FICO 9 as a scoring model to determine your credit score.

The Vantage score was created in 2006 as a competitor to the FICO score. Your Vantage score uses a scoring model that combines a set of consumer credit files from all three major credit reporting agencies to come up with a single score. Your score may vary depending on whether FICO or Vantage scoring models are being used because there are some noticeable differences.

For example, FICO and Vantage treat paid-off collections differently where FICO does include them for scoring purposes while Vantage often disregards them.

Vantage scores range used to range from 501 to 990, but the more recent scoring model–VantageScore 3, ranges from 300 – 850. With both types of scoring models, the lower your score, the more at-risk you are to lenders.

Learning about these two different scoring models can seem confusing, but this breaks things down in a simpler manner. The only thing you need to keep in mind is which scoring model is being used when you do check your credit. There’s no right or wrong scoring model be the way because it all depends on which one the potential lender or creditor is using.

Ready to check your credit for free now? Here’s what you need to know.

Not All Free Credit Check Sites Are Created Equal

There are tons of ads out there for sites that will allow you to ‘check your credit for free’. You must be aware that many of these sites are only telling half the story up front.

Some companies try to reel you in by letting you see your credit score for free only AFTER you enter a credit card number to sign up for a free trial. While there’s nothing wrong with a free trial, it becomes a hassle when you forget to cancel it and get stuck with a fee.

Also, some of these sites only let you view one of your credit scores from one credit bureau for free. You’ll need to pay to see the other scores and probably won’t even see your credit report either. Seeing your score without your full report won’t really help you understand the full picture. Hence, why these sites should be avoided.

Try these other free resources instead – Also don’t forget to download my free checklist including the ‘dos and dont’s of checking your credit for free online’ at the bottom of this post.

1. AnnualCreditReport.com

AnnualCreditReport.com is a well-known way to check your entire credit report for free. This site is authorized and will provide you with a full report from all three credit reporting agencies after you answer basic questions to confirm your identity.

The only catch is that you can only use this site for free once per year which is why you should print out your report when you receive it so you can reference it later.

2. Discover’s Credit Scorecard

Discover’s Credit Scorecard is a great online tool you can use to check your FICO score at no cost. Along with showing you your FICO score, you can also see important information about your credit profile like your payment history, revolving credit, number of inquiries, etc.

Even if you’re not a Discover customer, you can use this site for free.

3. CreditSesame

CreditSesame provides you with your credit score and report card along with monitoring and alerts about changes to your credit report.
CreditSesame’s uses a Vantage score and their report card provides you with a complete credit analysis including a summary of your payment history, utilization percentage, debt-to income ratio and more.

Related: Free CreditSesame Tools You Don’t Want to Miss Out On

4. Your Credit Card Company

If you have a credit card, you might be able to view your credit score for free through your credit card company. I’m embarrassed to say that had a Citi credit card for well over a year before I realized they provided my FICO score for free on my statements. Other banks and credit card companies I know that do this include: Discover, American Express, and Barclaycard.

Be sure to check your card member agreement and your statements to see if you can view your credit score for free as well. The only downside may be that you can only view your score quarterly in some cases as opposed to monthly along with the fact that you may not get access to your report for free.

These are the best free ways to check your credit score, credit report, or both and see exactly where you stand. Be sure to check out these options before you resort to using a paid site or having to enter your payment information to be billed later.

The post How to Check Your Credit Online For Free (+ A Free Checklist) first appeared on My Debt Epiphany.

The post How to Check Your Credit Online For Free (+ A Free Checklist) appeared first on My Debt Epiphany.

It’s a great time to make financial mistakes, but it’s even a better time to focus on getting on the right track so you can avoid having to struggle with money as you get older. Between going to college, establishing a career and starting a family, you’ll start to develop money management habits that will have short and long-term effects on your future.

I’m still in my 20s, but I feel grateful that I’ve learned so much about finances so far and I can apply the good money habits I’ve developed for many years to come. Whether you’re 21 or 28 (or even a bit older), here are some key financial moves you’ll want to consider making sooner rather than later.

1. Pay Off Debt

Many 20-somethings have some debt whether it’s student loan debt, a car loan, credit card debt etc. Being in debt can be stressful especially if you are just starting your career or can’t afford to make payments. It’s easy to want to put paying off debt on the back burner and apply for deferment programs if you have federal student loans.

However, one of the best things you can do in your 20s is pay off your high-interest debt as soon as possible. If you have a mortgage, some people will argue that you shouldn’t prioritize paying it off early and I agree with that sentiment. Mortgage rates are usually low compared to other types of debt and if you put a decent down payment down on your home, you should have some equity to start off with.

I don’t have a mortgage yet, so my husband and I are on a mission to pay down our student loans and other types of debt because the payments tend to eat up a lot of our income. When it comes to paying off your debt, I recommend employing a strategy that will allow you to tackle each debt one by one whether you want to start paying off your highest interest debt or a low balance loan. Make extra payments when you can and stick to a budget so you can prioritize debt payments.

2. Start Investing

Investing should be a priority in your 20s even if you have debt. It’s important to invest if you ever want to retire someday and improve your financial situation. The key to successful investing is starting early so time can do its thing. If you contribute to your 401(k) and/or Roth IRA and other funds consistently year after year, your contributions will begin to grow thanks to compound interest and this requires little maintenance or effort on your part.

I never had an employer who offered me a 401(k) plan so I started a Roth IRA (individual retirement account) with Betterment. I highly recommend Betterment for anyone who is new to investing because they are a trusted robo advisor and their online platform is really easy to use.

When you sign up for Betterment, you answer a few questions about your income and goals, then they actually I like how investing early can provide a great source of passive income in the future so no matter what anyone says, don’t put this off until you get older.

Alternatively, you can check out https://brokertested.com/forex-brokers-usa/ to find out more investment opportunities in the USA.

3. Keep Living Expenses Low

It’s much easier to keep your living expenses low when you’re younger. I know it can be tempting to splurge and give in to lifestyle inflation especially when you get raises at work or land a higher-paying job, but it’s important to enjoy a low-cost lifestyle before you start dealing with extra responsibilities like having kids and a mortgage.

When I graduated college, I was committed to keep living like a ‘broke college student’ for a few more years and I’m so happy I kept my living expenses low and simple. I learned how to adopt a frugal lifestyle and avoided getting into even more debt.

You might want to try driving an older car to save on transportation expenses, living in an affordable apartment with roommates, or cooking more at home to keep your living expenses low in your 20s.

4. Stop Using Parents as a Piggy Bank

It’s so easy to fall back on your parents financially when you’re younger. When I was in college, I remember my parents paying my rent a few times out of the year and giving me gas money here and there. Most parents are happy to help if they have the means to do so but that doesn’t mean you should take advantage of it.

In your 20s, it’s important to make an effort to ween yourself off depending on your parents as a financial crutch. There’s nothing wrong with living with your parents when you are trying to save money and get on your feet, but it’s not good to get into the habit of expecting them to take care of you especially when you’re an adult.

For starters, it’s not reliable to depend on your parents for money when you could be making your own and solving your own problems. If you start trying to be more financially independent now, you’ll improve your chances of being more stable and stressing less about money in the future.

5. Establish a Solid Emergency Fund

It may take some time to save up thousands of dollars which is why it’s best to start now. When I was 19, I got in a minor car accident that costs me at least $1,000 in fees and tickets plus repairs for my car. I had to take out a loan to pay that money because I didn’t have any savings.

Having emergency savings lined up is important because you never know when an unexpected expense will pop up. There is no rule regarding how much money you should have saved for emergencies, but you should choose an amount that will at least cover 1-3+ months worth of expenses. Some people have emergency fund balances that could cover expenses for an entire year.

Open a high-yield savings account (I use CapitalOne 360) and begin making regular contributions or set up automatic transfers. If doesn’t matter if you are saving $20 per month or $200 per month. Every little bit will add up when you encounter an unexpected expense.

6. Make Sure You’re Properly Insured

Don’t make the mistake of being uninsured! You are not invincible and there are a few types of insurance that you absolutely need to have. Auto insurance and health insurance are the two that initially come to mind because they are a requirement.

If you are a renter, you can look into renter’s insurance or home owner’s insurance if you own a home.

You may or may not need life insurance but I chose to sign up for a policy because I’m a mom and have a dependent. If you have a lot of student loan debt, you may want to sign up for life insurance as well since most student loans can’t be discharged even in death.

Being uninsured can cost you a pretty penny. Plus, insurance can protect your finances and give you peace-of-mind when you don’t know what the future holds

7. Consider Investing In Yourself

Investing in yourself can pay off tenfold. Attending college and getting my journalism degree was one of the best things I did do invest in myself because it helped me learn more about the industry I wanted to work in and earn more money. We spend money on so many non-necessities that we don’t really want to need each month.

It’s important to budget for things that will enhance our skills and provide us with opportunities and connections. Whether you want to take a course, attend a conference, or pay for training, investing in yourself can help you develop marketable skills that you can use to increase your income.

8. Build Your Credit History

Don’t forget to start building your credit in your 20s if you haven’t already. I got my first credit card at 19 after I learned how to properly use credit cards and I’m so glad I did. Having a good credit score comes with its perks like low mortgage rates for example.

It takes time to build good credit though so it may take a few years to improve your score as long as you avoid getting into debt and carrying high balances on your credit cards.

P.S. I Need Your Help

In order for me to continue to share valuable stories and information to make this site as helpful as possible, I need feedback on the content as well as suggestions for what you’d like to see. If you could just take a few minutes to complete a brief survey, it would mean the world to me. I value your opinion and your time which is why I made this survey short and sweet and easy to complete in under 3 minutes. You can find the survey here. Thank you so much for your support!

Have you ever struggled with taking any of these financial steps before? In your opinion which ones are most important on this list?

The post 8 Financial Moves to Make in Your 20s first appeared on My Debt Epiphany.

The post 8 Financial Moves to Make in Your 20s appeared first on My Debt Epiphany.

Even if they have never used a credit card before, people may still cringe after hearing all the horror stories about their friends sinking into debt with credit cards and tarnishing their credit score. While there are quick credit score repair services to consider, you want to make sure you’re actively monitoring your score and credit card usage. The whole fear about credit cards is only a result of people not really understanding how they work and how to use them.

I’ll admit, I was under the whole don’t-get-a-credit-card spell when I turned 18 so I refused to open an account of any sort and maybe that was a good thing. In 2013, the Market Watch, a Wall Street Journal publication, supported research from a direct study that indicated Congress didn’t believe young people under 21 were capable of being responsible enough to yield a credit card.

The article went on to address “the popular notion during the depths of the recession in 2008 and 2009 that college-aged people were irresponsible spenders lured by free pizzas and T-shirts to take on credit-card debt that would trash their credit history and financial lives.”

Quite frankly I couldn’t agree more. At 18 we are still a little too young to realize the purpose of a credit card and at that age it’s easy to make the mistake of thinking Capital One is just throwing us free money that we won’t have to worry about until much later.

But then I moved out of my mother’s house and I wanted furniture. Can’t finance furniture without credit. In my case I couldn’t even finance a measely couch. In fact, there were a lot of things I couldn’t do without credit and I got tired of it holding me back.

So at 21 I decided to break all the rules my ‘cash only’ friends advised me of and open my first credit card account with First Premier Bank. Let me tell you, First Premier is pretty crappy (in my opinion) and they don’t offer any special awards to card holders like some of the best rewards credit cards that are available currently offer. The interest rate is sky high, but opening the account was the best thing I have done to help my credit as a young person. Let me tell you why.

I committed to the purpose of credit

It’s crucial to understand that credit is not just a pay advance that allows you the opportunity to splurge at the store and make all types of outlandish purchases.

Your credit reflects your proven ability to borrow money and be able to repay it in a timely fashion. Your credit score, demonstrates your trustworthiness to lenders when paying back a loan. Once you realize that and you can commit to the sole purpose of credit and denounce your uncontrollable shopping habits, you’re ready for a card.

Related: I Raised My Credit Score By 150 Points, Here’s How

Be honest, Limit Amount of Accounts

When I opened my account I had to be honest about how much I knew I could handle. Credit bureaus like to see many accounts open. But in my case, I thought it was sufficient enough to just have one at the time.

I could’ve signed up for a few fancy department store cards but that wouldn’t be staying true to my commitment of slowly establishing a great credit score. A Mapping Your Future article confirms that having one card when starting out will help you better manage your spending.

Having several accounts could actually hurt your credit if you can’t keep up with all the payments and they start to accumulate interest. Plus, if you apply for a lot of credit cards and get denied the hard credit inquiries will definitely hurt your score.

Now that I’ve got the hang of this whole credit thing I actually do have a few cards and a diversified range of credit and let me tell you, it all helps.

Related: You Can Now Boost Your Credit Score Without Taking more Credit Card Debts

Carefully Monitor Utilization

Monitoring your credit is crucial if you are trying to build it over time. CreditKarma.com is a free website that allows you to track your spending and monitor your credit and you can login to their system as much as you want. They also pull credit scores from TansUnion and Experian.

Don’t ever make the mistake of maxing your credit card out. For example, if your limit is $1000 a month you shouldn’t be spending $1000 that month or for any month. I always try to only utilize 20% or less of my limit. Credit Karma’s blog states that 30% utilization each month would be the maximum. Anything less than that will help increase your credit score. If you utilize more, your score will drop and you will seem like a liability who is depending heavily on your entire credit limit every month.

Other Common Credit Card Mistakes to Avoid

• Not checking your statement each month to identify any discrepancies early on
• Forgetting to pay you bill each month and not knowing when your billing cycle ends
• Not reading the terms and conditions carefully
• Carrying a balance each month

Stick With It

Credit is not built overnight and it can take years to establish a good score and enjoy the benefits of it (low-interest rates). I’ve made a goal to stick to my monthly payments of paying my entire balance in full so I have a perfect payment history.

Unfortunately, I still plan to keep the First Premier account open because when you close accounts it can hurt your credit score. The never-ending cycle of credit is to always have an open account and to always be paying something, even if it’s only a small payment.

What was your first credit card and did you ever make any of these mistakes? Please share your stories below!

The post Credit Cards Are Not Evil: Don’t Make These Common Credit Card Mistakes first appeared on My Debt Epiphany.

The post Credit Cards Are Not Evil: Don’t Make These Common Credit Card Mistakes appeared first on My Debt Epiphany.