Credit Score Calculation and Checklist

FAQ and checklist.pdf.pdf

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In today's financial system, your credit score is one of the most powerful gatekeeping systems influencing your financial opportunities. It can affect your ability to buy a home, finance a vehicle, qualify for loans, and secure favorable interest rates. While many people know the basic factors that impact their credit score, few understand how those factors are weighted or how long they affect their financial future. Check out this info graph for the highlights! For more details keep reading about how I was negatively impacted by not understanding this system. See attached for free pdfs with FAQ and checklist.

My company is born out of my frustration with trying to understand what I should be doing as an adult when it wasn't taught to me in high school. I learned about credit the hard way, through experience and only recently fully understood through a lot of research.

When I applied for my first apartment, I was denied without a co-signer. The reason was because I had no credit. Then I could not get a co-signer (I believe my mom's exact words were "Hell, No."). At that point, I could have had credit building for years! I had no idea I would be denied without ever making a mistake. I thought my record was "clean". As a teenager, I thought debt was bad so I used my debit card exclusively. Luckily I had a roommate and their dad was willing to co-sign.

I tried to build credit by applying for a credit card, only to be denied again in the letter it stated the reason was because of no credit history. I was so frustrated "I know I have no credit that's what I am applying!" Unaware there were alternative options, I applied for another card from another company. I was denied again. I didn't realize that each application was dinging my credit leading to my rates for insurance and future loans to go up. Before I had the chance to build credit, I was already tanking it! I was denied access to resources and making it more expensive for myself to live in the future because of this credit financial system I didn't understand.

Check out the youtube video if you also want to listen to the explanation: https://youtu.be/0LdH0MzlnFI . Make sure you save the checklists for future reference!

Credit Success Checklist

Essential Actions to Avoid Credit Disasters

✔ Pay your bills on time

✔ Stay out of collections (use a trusted contact to confirm, avoid mail scams)

✔ Turn on low balance notifications on your checking account to ensure payments don’t bounce which can make them late and cause costly in fees.

✔ Only take on credit risk you can afford per the spend budgeted. Be aware when you cosign for someone: your credit is impacted if they pay their payments late and you are fully legally responsible for the debt if they default.

✔ Make sure you have adequate insurance for areas of your life with exposure.

Pro tips for Improving Credit

✔ Open a secured credit card when you are financially and legally able to (18)

✔ Empower the youth and consider helping them build their credit as an authorized signer (around 13)

✔ Turn on autopay to prevent late payments.

✔ If possible, pay credit card balances in full each month and consider paying even more frequently to keep a low balance ratio to the max on the card (under 30%).

✔ After you have had a card for a period of time, request a limit increase your balance ratio can be even smaller (under 10%)

✔ Consider timing: Avoid opening multiple accounts at once. Avoid opening accounts if you are approaching a loan application as it will lower the score at first.

✔ Consider multiple smaller balances vs fewer larger balances of debt if possible.

✔ Review your credit report at least annually and dispute errors

✔ Make sure you can cover unexpected bills by building savings. Cash savings should be able to cover at least 3 months of expense. Contribute as soon as possible to 401k for the minimum of employer match to 10/15% as sustainable.

The Fiscal Female is born out of the question I asked myself over and over "How are normal people supposed to figure this out?!" Stay tuned for more topics!

credit score checklist.docx.pdf

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