Cash might be king, but credit is a gatekeeper — from car lots to human resources.
More and more, your credit score is being pulled for things that used to require little more than a handshake, says Milford Carter, financial adviser and president of Carter Financial Group in Tulsa. It can even be an issue when applying to a new job.
“Nowadays, employers are pulling your credit,” he said. “If you’re going to apply for life insurance or any of these other types of insurances, they’re pulling your credit. So credit is starting to become a determinant for a number of different things that, in a lot of ways, have absolutely nothing to do with credit, right?”
Since credit can help open up new doors, experts say a few strategic shifts can trigger an immediate boost.
Understand your score
Everyone gets one free credit score report a year. Knowing what’s hurting your score will help you know what to fix first. You can request yours on creditreport.com.
Your credit score is largely determined by two factors: paying on time (35%) and how much you owe (30%). Missing a payment by more than 30 days will tank your score while keeping your balance low will build it.
“That’s going to be something that will help to boost your score immediately, just by making adjustments to payment history and balances, paying down those balances,” Carter said.
Pro tip: Timing is everything. Ask your creditors exactly when they send your data to the credit bureaus (Equifax, Experian, TransUnion). Whatever your balance is at that exact moment is what’s reported in your credit history, so make sure to pay your accounts down before that “snapshot” is taken.
Become an authorized user
Credit bureaus also look at how old your accounts are — the older, the better. So asking a trustworthy person who’s consistently paid off their debts to add you as an authorized user to their account can look very good for you, as long as they have good credit.
As an authorized user, you can make purchases on this person’s credit account. But you aren’t responsible for paying it off. If you run up this person’s debt, you could harm their credit score. And if they miss some payments, you could see yours go down. So you want to make sure all parties involved are trustworthy and reliable.
Take advantage of Experian Boost
With this free program, you can add utility, telecom and streaming payments to your credit history. Nowadays, Milford says, utility companies are also pulling your credit, adding to the list of non-traditional ways your credit is being evaluated.
He said this won’t be a huge boost, but it’ll help raise your score by a couple points. You just need your Social Security number and phone number to start that process. Register here.
Challenge your credit
Anything in your credit report can be challenged, and if the credit reporting agency doesn’t get back to you within 30 days, they have to remove that from your report. This doesn’t mean the debt goes away, but it could help your score if you see something doesn’t look right.
The City of Tulsa’s Financial Empowerment Center can give free advice on how to build or restore your personal credit through their financial counseling program. Their services — which also include things like estate and legacy planning — are available in other languages.
News decisions at the Tulsa Flyer are made independently of our board members and financial supporters. Read more about our editorial independence policy here.
