A fashion blogger employed four simple ways to enhance her credit score
Mary Ojo, a fashion and beauty blogger at Specs and Blazers in Los Angeles, used her bank card in ways she couldn’t notice that would hurt her credit score while she was in her twenties.
She was notorious for paying late or barely the bare minimum.She’d also have a credit card balance close to her spending limit.
“We are not taught the importance of credit as immigrants or in African-American society in general. We’re instructed to avoid it or to destroy it, with no middle ground.As a result, I’d like to use my position to tell people that using credit is acceptable “According to Ojo.
It wasn’t until she wanted to buy a house that she discovered how crucial having a strong credit history was for receiving a mortgage or other long-term loan from bank. That realization motivated her to improve her credit score and to take out a loan from Green Day in-person.
Her credit score continues to increase due to the basic tactics she learned and continues to use.
What she does is as follows:
She utilizes her credit card as if it were a debit card.
Ojo had previously avoided using her credit card for regular transactions.
It was saved for situations when she needed to make a large payment and didn’t have enough cash on hand. That meant she’d use her credit card to pay her rent in months when she couldn’t afford it.
She also used her credit card when she couldn’t make a car payment or couldn’t afford to pay a medical expense. Every time she used her card, she was getting closer to her credit limit because of these large expenditures. She ultimately discovered that paying for minor daily expenditures like food and petrol with her Chase Sapphire Preferred Card rather than her debit card was a terrific way to improve her credit. She can pay her debt in full on a more frequent basis because the charges are minor.
“I wouldn’t use my credit card because I was always terrified of it,” Ojo explained to Insider. “This doesn’t help since, with credit, you have to show that you use it and then pay it back.”
She never exceeds 30% of her credit limit.
She made a personal goal for herself to keep her credit card balance below 30% of her credit limit. She checks her Chase account every day to see how much money she has.
She can go back to using her debit card if she gets close to that limit.
“The lower your credit utilization before your due date, the better, I was instructed.
If your credit card limit is $1,000, for example, you should keep your balance to $300 “Insider spoke with Ojo.
Setting a spending limit is important since one of the five key variables that go into determining a FICO score is the amount of money due concerning the credit limit.
This is because a big credit balance may be interpreted by lenders as a hint that you are a higher-risk borrower. Experian experts also urge that you keep your credit card debt below 30%.
Her credit card balance is paid in full twice a month.
Another habit Ojo picked up along the way was paying off her balance every few weeks rather than every month. This prevents her from having a large balance at the end of her statement.
Her credit utilization ratio remains far below 30% as a result of this approach.
Getting the payments out of the way as soon as possible is a good habit to develop since it commits available funds to pay off the debt sooner rather than later, reducing the risk of spending that money on other items.
Furthermore, daily interest costs are calculated based on your daily balance. Making early payments, even before the due date, reduces the average daily balance, which might help you save money on interest if you can’t pay your bill in full.
Her credit card payments are automated for her.
Ojo used to write down her payment dates on a calendar until she realized she could automate her payments every month through her bank. She now has it set up such that she is paid in full on the 9th and 23rd of each month.
Automating your payments is a terrific approach to make paying off a debt a little easier each month. It also lowers the chances of failing to make a payment on time, as long as you keep enough funds in your bank account to cover the total outstanding.
Otherwise, a bouncing payment could result in further fees. You can set up payments online through your credit card company’s bill payment service, with the option of paying the minimum or the entire sum. If you choose the latter, make sure to monitor your balance and exercise regularly.