Words In Motion

Share this post

How to Fix a Lousy Credit Score

wordsinmotion.substack.com

How to Fix a Lousy Credit Score

4 easy ways to get more money from your lender

Tree Langdon
Dec 20, 2022
1
Share this post

How to Fix a Lousy Credit Score

wordsinmotion.substack.com

Hi, it’s Tree Langdon from Medium and LinkedIn

person wearing sunglasses, hiding behind a fan of one hundred dollar bills
Photo by Shane on Unsplash

Words In Motion is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Why does my credit score matter?

Banks and other lenders have to have a way to decide if you’re good with money or if you tend to get in a bit over your head.

They use something called a credit score.

It ranges from 300 (low score) to 850 (highest possible score).

  • They use it to decide if they will lend you money.

  • It’s also used to decide how much interest they’ll charge.

  • If you’re at higher risk (lower score), they charge you more interest.

Lousy credit scores can be self-fulfilling.

If you aren’t great with money or have little money, your score is likely lower, so they charge you more interest on any debt.

That costs more, which takes you longer to pay off, and puts you in a situation where you might have trouble paying it off.

If you have trouble paying it off, it lowers your score and increases the rate they charge.

It’s a vicious circle.

Lenders also use credit scores to decide if you must make a down payment and how much it will be.

It’s a gateway. 

If your score is low, the gate might be closed to you.

Here are 4 steps you can take today

They might not increase your credit score much on their own, but if you put each of them into place, it will make a difference to your score over time.

Pay all your bills on time.

  • This is the one factor that makes the most difference.

  • Your payment history counts for 35% of your credit score.

  • So make an effort to make the payments.

Pay down your balances and keep them low.

  • If you have credit that you don’t use anymore, keep the account open because it improves your credit history.

  • Your credit history counts for 15% of your credit score.

Don’t make a lot of credit applications at once.

  • Each application can impact your score, making it fall.

  • They usually look at a two-year period for this one, so start now.

Credit mix counts for 10% of your score.

  • Lenders like to see you have lots of different credit accounts.

  • But remember, low balances are the key.

  • They want to see that you can handle credit.

  • They don’t want to see a lot of debt.

Lenders want people who are responsible with their credit. They look for an established history of reliability.


Words In Motion https://wordsinmotion.substack.com/

On Medium…

4 Steps to Achieve Joy

Get started writing today

How Blue Zone Habits Help You Live Longer (my all-time most popular post)

Things I’m Enjoying…

Today’s Deals

Start with what, not why


  • This article is not to be considered investment or financial advice and is for informational purposes only. Some specific information relates to the U.S. and rules may be different in other countries.

Words In Motion is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Share this post

How to Fix a Lousy Credit Score

wordsinmotion.substack.com
Previous
Comments
TopNewCommunity

No posts

Ready for more?

© 2023 Tree Langdon
Privacy ∙ Terms ∙ Collection notice
Start WritingGet the app
Substack is the home for great writing