4 Tips to Protect Your Credit Score

4 Tips to Protect Your Credit Score

It’s not a myth— your credit score is important. Whether your goal is to buy a personal home or to invest in real estate, the first four loans of a year will be based primarily on your credit score. It is a measure that indicates how trustworthy you are to lenders.

Here’s a quick breakdown of the credit score spectrum:

850- Highest

720- Outstanding

680- Good

620- Danger

500- Needs Work

The score is made up of 5 components. Payment history accounts for 35%, outstanding credit balance holds 30%, length of credit history is 15%, and both the type of credit and credit inquiries account for 10% each. Unfortunately, 79% of credit reports contain mistakes of some kind. Here are some tips that will help you stay up to speed on maintaining an accurate score.

4 Tips to Protect Your Credit Score

  1. Frequently Inspect Your Report: Scan your report regularly to ensure that all of the financial information is up to date and accurate. Most of the free reports don’t include the actual credit score. You can pay for a copy of your credit report and score from each of the following agencies: Experian, TransUnion, and Equifax.

 

2. Check Open and Closed Accounts: Another important aspect to note on your report is the accuracy of your closed and open accounts. As many as 30% of reports incorrectly list closed accounts as open. This can negatively impact your credit score!

 

3. Keep Your Credit Card Balances NO MORE than 50% of Available Credit: Know the limits that you have on your card and try not to touch them. Really, the best case scenario is to keep your balance no more than 33% of whatever your available credit is. So, if you have a $10K limit, it’s best not to owe more than $3,300 at any given time.

 

4. Form a Corporation: This is a real nugget for investors. When you form a corporation, you can have your autos and lines of credit put in the corporation’s name— not your own. When you get loans, be clear that you do not want them reported on your personal credit at all.


Understanding credit is a key tool in the wealth-building process. If you want to learn more about the ins and outs of credit, I recommend reading my book Money Mastery. Or, if you’re a real estate investor with questions about how you can best leverage credit, consider signing up for our virtual upcoming Real Estate Workshop April 23-25. For a limited time only, you can get $50 off when you use the code RELIVE50 at checkout. Click here to register.

Billy Epperhart
Billy Epperhart
billy@billyepperhart.com
2 Comments
  • Kelly Stevens
    Posted at 01:51h, 01 April Reply

    I haven’t checked my credit score in a long time. After checking my score, I had learned that there were 5 or 6 accounts that were opened and then closed due to non payment. Or never even paid on. Looking at them closely I noticed 3 or accounts weren’t mine. And I can prove they weren’t mine because I was incarcerated at the time someone opened them. One account said I co-signed for a loan and even grave me the address to the person that opened it. ( it was an old aquantance of mine)
    Days later after finding this all out I emailed the company that showed me this activity and told them about this matter. They emailed me back and said they contacted a lawyer and they would reach out to me with in 48 hours. This was the first week of March,2021 and I haven’t heard a thing from them 😞 I have been sober since October,2019 and I’m trying to repair the damage I let go while I was in active drinking . Can you please tell me how I can fix this? Like I said I need advice on what to do to get my credit score and life back on track. Thanks

    • Hannah Grieser
      Hannah Grieser
      Posted at 10:37h, 05 April Reply

      Thank you for connecting with Billy and Becky and for reaching out with your question about your credit report. We are so blessed to have you a part of the WealthBuilders family, and inspired by your story of recovery.

      The first step we suggest is that you file a dispute with the credit bureau company on the accounts that have been opened in your name but are not yours and any other information on the credit report that is inaccurate. Here is a link to the government FTC site that provides you with how to file the dispute, the phone numbers for the credit bureau companies, a template for written communication, and more. https://www.consumer.ftc.gov/articles/0151-disputing-errors-credit-reports

      While the banks should respond quickly to resolve an issue like this, going directly to the credit bureaus is usually the best way to go because banks and finance companies are required to respond to the credit bureau agencies within set governmental guidelines. They will reach out to the bank and require a response based on your filed dispute. I hope this is helpful for you, and please keep us posted on your progress.

      Thank you again for connecting with WealthBuilders! We love and appreciate you. God bless!

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