Better Credit:

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How to Win the Game They Don’t Want You to Understand

Let’s talk about credit. That magical three-digit number that determines whether you get a cozy house, a decent car, or an overpriced personal loan at an interest rate that makes payday lenders jealous. Love it or hate it, your credit score is the financial report card that never stops grading you.

Why Credit Matters (Even Though It Shouldn’t Be This Complicated)

Credit affects everything. Want a house? Better have good credit. Need a car? That credit score will determine if you’re rolling in a brand-new ride or a 20-year-old rust bucket with a tape deck. Applying for a job? Some employers check credit scores because, obviously, being able to manage debt somehow translates into being a good employee.

How Credit Scores Work (or How They Keep You Guessing)

Your credit score is a mysterious little number, ranging from 300 to 850, that credit bureaus guard like it’s a state secret. Just kidding, they actually have no control over credit scores. A credit score is only calculated when you have your credit file pulled. And the calculation is done using a computer software that is proprietary to FICO. The breakdown looks something like this:

• Payment History (35%) – Did you pay your bills on time? Because one missed payment can tank your score like a bad stock market crash.
• Credit Utilization (30%) – Lenders view a low credit utilization rate as a sign that you are using credit responsibly and not overly reliant on borrowed money. This makes you appear as a lower-risk borrower.
• Credit Age (15%) – The longer you’ve had credit, the better
• New Credit (10%) – Every time you apply for credit, your score takes a hit. Because when you open a new credit line, it lowers the average age of all your accounts
• Credit Mix (10%) – Demonstrates your ability to manage different types of credit responsibly. Lenders want to see that you can handle a variety of credit accounts, as this indicates financial stability and lower risk.

How to Improve Your Credit (Without Losing Your Mind)

1. Pay Your Bills Like Your Life Depends on It

Seriously, on-time payments are non-negotiable. Even one late payment can haunt your score for seven years—because, apparently.

2. Keep Your Credit Utilization Low

The general rule is to use less than 30% of your available credit. The optimal percentage to earn the most points is less than 10%. This applies to each individual credit card, and it also applies to the sum of all your credit cards. If you have a $10,000 limit, using more than $3,000 could drop your score—even if you pay it off in full each month.

3. Don’t Close Old Accounts

Credit history length matters. Closing an account will cause your score to go down. Because the amount of available credit decreases which will increase the credit utilization percentage. Closing old accounts will also reduce the average age of your accounts. You’ll want to use your old credit cards from time to time. Because you want to avoid the credit card from becoming inactive. A lender can close the account due to inactivity. If your credit card becomes inactive, you do not receive longevity points for that account. And it does not look good when lenders see an account was closed due to inactivity. You should buy something you would buy anyway, such as tank of gas. You’ll want to use the credit card at least once every three to four months to keep it active.

4. Dispute Errors Because Credit Bureaus Make Mistakes (A Lot)

One in five credit reports contains errors. That’s 20% of people being unfairly punished. Check your credit reports for free at AnnualCreditReport.com and dispute any inaccuracies—because no one else will fix them for you.

5. Stop Applying for Too Many Credit Cards at Once

Every time you apply for credit, your score drops a few points. Because lenders do not know how you’ll be able to handle a line of credit. Applying for multiple credit lines in a short time may signal to lenders that you’re desperate for credit, which can be seen as risky behavior. Space out applications to avoid unnecessary dings.

Advanced Credit Strategies for Financial Domination

1. Credit Card Rewards & Travel Hacking

Use credit cards strategically to earn cashback, points, or travel rewards. Just don’t carry a balance, or the interest will eat up any rewards you earn.

2. Balance Transfers: Outsmarting High Interest

Have high-interest debt? Move it to a 0% APR card and pay it off before the promo period ends. Just don’t get caught in the cycle of opening new cards every year.

3. Business Credit: A Whole New Playing Field

If you have a business, build business credit. It’s separate from your personal credit and can get you better financing options without affecting your personal score.

Final Thoughts: Take Control of Your Credit

The credit system is confusing, frustrating, and sometimes downright unfair. But knowing how it works gives you the power to play the game—and win. If you pay the balance off, on-time and keep your credit utilization percentage low, you’ll never have a low credit score.