For better or worse, your credit score is one of the most important numbers in your life. Lenders use that score to determine if youâ€™re a good credit risk, if theyâ€™ll give you a loan, and how much theyâ€™ll charge you for all kinds of loans.
BlackEnterprise.com, caught up with the Money Coach Lynnette Khalfani-Cox, who shared three often-overlooked ways to boost your credit score.
1. If you are a renter (and about 55% of African Americans are), add your rental payment history to your credit reports: Numerous studies show that this can give you a nice bump, sometimes 20-points or more, in your credit score. There is, however, a catch: You can’t add this data to your Equifax, Experian, or TransUnion credit reports yourself. You have to use a third-party company to do it because they have to independently verify it with your landlord or property owner. Fortunately, several companies do this, including RentTrack.com and RentReporter.com.
2. Try piggybacking: Piggybacking is a technique where you get added onto the credit accounts of someone with a positive credit history. For example, if your spouse or a parent has good credit, you can get added as an authorized user on one or two of their credit cards. This lets you add positive credit history to your own credit files and increases your credit scores.
3. Get a secured credit card: Some 20-something millennials have “thin” credit or no credit, or perhaps they and others in their 30s, 40s, or 50s have had credit mistakes in the past, such as late payments, charge-offs, collections, or even a bankruptcy.
A lack of a traditional credit history or previous credit blemishes can make it tough to establish or re-establish credit and obtain a good credit score. But one strategy to overcome those problems is to obtain a secured card.
With a secured card, you put a certain amount of moneyâ€”like $500â€”on deposit with a bank, credit union, or other lender. The amount you put up to open a secured card becomes your credit limit. Then if you buy anything or charge on the card, you just pay it off on time each month, and that boosts your credit score. Just make sure that any secured card you open reports to all three credit bureaus so you get the most bang for your buck from a credit-scoring perspective.
For more of Khalfani-Cox’s tips, check out her website, TheMoneyCoach.net.