I’m a real estate agent, so I deal with credit issues all of the time. Since I know how important credit is for everyone, I was excited when a PR company asked me to put together a sponsored post for Credit Karma™. While I was compensated for sharing this information, I only agree to work with companies that I believe will benefit you!

Everyone knows that it’s important to have good credit. But people without good credit often act like they are being treated unfairly when they are turned down for loans or have to pay higher fees on credit cards.

The reality is that your credit score is the single most defining item used to define your overall financial health. Your credit score impacts whether you can buy a home, rent an apartment, buy a car and get a credit card with low interest rates. Your credit score is used by employers to see if they want to hire you.

An excellent credit score means you will get the best interest rates and best benefits — it will literally save you money.

So how do you get an excellent credit score?

If you make good financial choices and you are able to pay all of your bills on time, every SINGLE month, you WILL eventually have a high credit score.

I say eventually because it’s almost impossible for someone just starting out with credit to have a high score. 

The purpose of credit scores is to reassure people who are considering lending you money that if they go ahead and approve the loan, you will pay the money back on time.

But if you have only been using credit for a short amount of time, they can’t be sure that you are prepared to deal with unexpected financial storms. They wonder if you will be able to continue making your payments if life throws you a curve and you lose your job or your car needs expensive repairs.

Some people who lose their jobs have enough of an emergency fund that they can keep paying their bills until they find the next job. Other people run out of cash quickly.

If you are one of those people who plans for rainy days, financially, you’ll be prepared to pay your bills even if the furnace breaks and you get socked with a $4,000 bill you weren’t expecting.

If this sounds like you, then you probably already have a high credit score. Or you will in a few years.

You see, it takes time for credit scores to creep up. Time for the credit bureaus to see that you have always paid on time even when you hit a stormy patch.

How to Get a Credit Score Over 800:

I really do know what I’m talking about here.

I’m working on selling my condo so I can move back into a house where Milo has a yard and I can start fostering dogs again.

As I got started on my moving plans, I called my lender and sent her my last 3 tax returns and a bunch of bank statements. Along with reviewing everything I sent her, she also checked my credit scores with all 3 of the credit bureaus (TransUnion, Experian and Equifax).

I know that you are supposed to check your credit report every year, but to be honest, I haven’t checked my credit reports except when I’m moving.

Which means I haven’t pulled a credit report for 2 years. And before that it was 7 years!

I’ve been really lucky. I didn’t have any errors on my credit reports that hurt my scores. In fact, my scores have steadily been increasing each time I’ve checked my credit.

I knew I had good credit, but I’ve never seen scores like this before. All 3 of my credit scores are over 800!

So how did I get my scores so high?

I got old. 

Seriously, it’s almost impossible for someone in their 20s to get a credit score over 800. They simply haven’t had credit in their own name long enough.

I took out my first credit card when I was 16 and got a job at a Famous-Barr, a local department store that was eventually purchased by Macy’s. That was 31 years ago.

In order to take advantage of the employee discount, Famous-Barr employees had to use a company credit card or you had to show the credit card along with your driver’s license in order to pay by check. So I took out a credit card that had a $500 credit limit and started my journey of earning my credit rating.

At some point years ago, I closed that credit card account. If I still had it, my credit score would be even higher because the credit bureaus like it when people have had a credit card for a really long time!

 

I also pay EVERY single bill EVERY month. I’ve paid a few late fees over the years, but that doesn’t hurt your credit as long as you make your payment before it is 31 days late.

No need to fret if you have had late payments in the past. While these late payments will impact your credit for 4-7 years, they will eventually fall off of your credit report. Start today and commit to making every payment on time and you’ll be on your way to excellent credit!

What Impacts Your Credit Score?

I took a continuing education class on credit to renew my real estate license a couple of months ago, and learned just about everything you could want to know about credit.

There are 5 major factors that impact your credit scores:

• Payment History – 35% of your credit score is from paying by the bill due date or during the grace period
• Utilization – 30% of your credit score comes from how much of your available credit you are using (try to use 30% or less of your combined credit limits)
• Length of Credit History – 15% of your score comes from how long each credit card or installment loan has been active
• Inquiries – 10% of your credit score is based on the number of credit inquiries to your report (FYI…you are allowed to shop rates so all inquires for a car loan or mortgage within 30 days are treated as a single inquiry)
• Credit mix  – 10% of your credit score comes from the mix of credit in your name (ideally you should have a mortgage, car and 2-3 credit cards/installment loans)

Credit Karma™ Makes Improving Your Credit Easy:

While I know that everyone should take advantage of getting a free credit report annually, I never do. Well, I did it once. I received a report that was really hard to decipher and was disappointed when I realized it didn’t include an actual credit score. So I never did it again.

And that was a big mistake.

I’ve been lucky. There haven’t been errors on my reports and I have never had my identity stolen. But since I never checked my credit regularly, I wouldn’t know about it until it is too late (like getting turned down for a mortgage!).

I’m sure you have seen commercials like I have of guys singing and talking about getting a free credit report, but there’s always a catch. Most of the websites where you can get a free credit report will charge you to actually get a credit score. Plus, there is normally a fee to monitor your credit.

Credit Karma™ is my new solution to making sure nothing goes wrong with my credit in the future.

According to Credit Karma™ data, 83% of consumers have a credit score lower than 720, which is considered the minimum score to qualify for financial products with the best interest rates, terms and benefits. Plus, almost half of employers check credit before hiring employees.

So even if you never intend to buy a house or take out a credit card, you need to pay attention to your credit scores!

Credit Karma™ gives you the actual score from TransUnion, one of the 3 industry credit bureaus. While the website doesn’t give you any information from the other 2 credit bureaus, monitoring the TransUnion score will let you know if there is anything fishy going on (like identity theft) and you’ll be able to see how you are doing on improving your credit.

There ARE differences between the scores and what is on the credit reports of the 3 credit bureaus, but if you do something that really hurts (or helps) your credit or you identify gets stolen, all 3 scores will go up or down together.

So, make it easy on yourself and sign up for Credit Karma™ to monitor everything happening on your TransUnion credit score.

I really like that you can check your credit score weekly without it impacting your credit score.

I know I said earlier that 10% of your credit score comes from inquires, but those are inquires by others who are considering extending you credit (hard inquiry). When someone is just checking your credit report but won’t be lending you money (soft inquiry) or you check your own credit, it won’t affect the score.

So you can check it weekly and it won’t lower your score.

I also really like that you can opt to have Credit Karma™ monitor your credit report for daily changes and send you notifications by email. If someone tries to sign up for a credit card in my name and it wasn’t me, I’ll know about it now.

If you want, you can even add your bank account and bills to your Credit Karma™ account and be sent bill reminders so you never have a late payment again!

I’m usually skeptical about services like this, but Credit Karma™ does NOT ask you for your credit card information to sign up and does not require you to add any of your bank account information. You DO have to give them your social security number because your credit report is pulled using that number, but the site is secure.

I did sign up when I was offered this sponsored post opportunity to check it out, but I could cancel it tomorrow if I wanted to and no one would know. But I won’t. I really like the services they are offering for free.

How often do you check your credit?

This is a sponsored post written by me on behalf of the Credit Karma™.