You to your credit score:
Me to you:
There's no need to carbo load your score. Your credit score is something that takes time to grow. So don’t worry if it’s not quite where you want it to be right now.
Plus, you have more important things to think about, like how to avoid getting into a political debate with your druncle on Thanksgiving.
That’s why we did the thinking for you and came up with this nifty list of ways to keep your credit score from getting hangry. 👇
🍗 Try not to miss a bill or loan payment
Even if you just pay the minimum balance on a loan, showing creditors that you’re able to keep up with your payments can go a long way. On the other hand, if you miss a payment, it can potentially dock your credit + result in late fees and interest charges ... ew.
If you need some help with saving at the moment, Cleo can help you budget.
🍗 Don’t use more than 30% of your credit limit
There’s this thing called ‘credit utilization.’ It’s just an annoying word that means the amount of money you’re using in comparison to how much you’ve been loaned. It looks really good for you if you use less than 30% of your overall credit limit.
So if your loan is for $1,000, you should aim to use no more than $300.
🍗 Think twice before you close out a credit card
Instead of closing out a card, it’s *sometimes* a better idea to just stop using it (assuming you’re not paying an annual fee). One reason is because closing an account can lower your overall available credit amount, which goes hand in hand with that credit utilization jargon we just talked about. 👆
It can also reduce the average age of your credit history. And that’s no good because the credit people want to see that you can maintain a loan for a long time.
🚨 btw: Closing out a credit card is not the same as paying off a loan. Paying off a loan over time does wonders for your score.
🍗 Diversify your credit portfolio
When you’re ready, you should consider expanding your range of credit accounts. This doesn’t mean you should go out and apply for five loans all at once.
It means you should work your way up from successfully maintaining a secured loan to successfully maintaining a healthy mix of different types of loans (credit card, auto loan, mortgage, etc.).
🍗 Start small and work your way up
Building credit doesn’t have to be a daunting process. It all starts with taking small steps. Getting a secured loan is a good place to start because you could get approved regardless of your credit history and there’s very little chance of going into debt since you use your own funds as a security deposit.
If you want to start working on your credit, there’s this thing called the Cleo Builder subscription. With it, you could get a secured card designed to help you build credit, plus:
✨ a cash advance of up to $270*
✨ cashback on some of the shit you buy
✨ your credit score and history
Ready to work on your credit health?
*The Credit Builder Card is issued by WebBank, Member FDIC pursuant to a license from Visa USA Inc. Access to the Card is subject to approval.