Week 4 Challenge:
Credit

Superhero Captain FICO
Take good care of your credit, and your credit will take good care of you!
– Captain FICO

 

Dr. Rich Wisely SuperheroWelcome to the final week of our Superhero Financial Challenge. I once again commend you for your desire to improve your financial well-being.

This week, I, Dr. Wisely, will share resources that will help you cultivate your credit capabilities! With persistence, you will keep a credit score like Captain FICO’s!

Wherever your credit comprehension is today, we will help you reach the next level in your super journey. Let’s begin!

Week 4 Challenge: Credit

for Those Unsure of Their Credit

Congratulations on making it to the next step of your financial challenge. If you are committed to changing your future, there is nothing that can stop you.

This challenge relates to last week’s Debt challenge, which called on the savings and budgeting techniques you practiced in Weeks 1 and 2.  To improve your financial well-being, you will need to combine these skills. It doesn’t work just to do one by itself.

Since you haven’t checked your credit score or your credit report, we will start with those to give you an idea of the health of your credit today.


Read the suggestions below. After you have completed one or more of these items, email DrWisely@unitusccu.com, include “Completely Credit Confident” in the subject line and tell me of your success. This will earn you a chance to win $500!*

How do you build great credit? Follow the tried and true formula. The biggest key is getting into good habits (sound familiar?). Follow the guide below and you will be on your way to cultivating commendable credit!

Know your credit score.

  • Knowing your credit score is the essential first step in improving your credit. This will help guide you where you want to go.
  • For Unitus members, you can do this easily and it’s free if you have a loan, a checking account and are enrolled in eStatements.
    1. Log into uOnline.
    2. Hover over Account Services, select Your FICO Score.
    3. Read and agree to the Opt-In Terms and Conditions.
  • If you are not eligible for a free FICO score from Unitus, you can get your score for free at Credit Karma. Just be careful to check out their terms and conditions and their privacy policy before agreeing to anything; you may also be signing up to receive offers from them.
  • If you want to be more thorough, you can purchase a package that contains all three of your credit scores as well as all three of your credit reports (one score and one report from each credit bureau) for a one-time cost of $39.95. Then using the methods below, you can get your credit reports for free each year (and if you meet the requirements for a free FICO score from Unitus, you won’t need to pay for that either)!

 

Get your credit report for free.

  • Understand what lenders see when they view your credit history.
  • Visit annualcreditreport.com to request your free credit report. You are allowed to obtain one free credit report from each of the three credit bureaus every year.
  • By staying up-to-date on your report, you can dispute errors which can help raise your score.

 

Review your credit report for errors. Take action if needed.

  • Your credit report has a big impact on your financial life. Sometimes your report has errors that unfairly lower your score. Check for these common sources of errors and learn how to dispute them if necessary:
    1. If you have debt collections on your report, consider sending your creditor a goodwill deletion request letter. This will remove the negative hit on your report, improving your score.
    2. If you see any inaccuracies on your report, file a dispute with the credit bureau. Did you know that after you file a dispute, the credit bureau will contact the information source and if the source does not respond in 30 (or sometimes 45) days, the information will be removed from your report? This can be a quick way to increase your score.

 

Learn the 5 things that make up your credit score.

  • This is the blueprint for your success with credit. Knowing what makes up your credit score will help you figure out how to improve your score.
  • Visit our page chock full of information on your credit report and credit score.
  • We encourage you to do more research about your credit score, and visualize the components in new ways. If you are a more visual learner for example, think about it like this stylized pie chart from myFICO.

 

Write down 1 way to improve each part of your credit score. 

  • For each question below, grab a pen or pencil and anything to take notes on. Actually write the answers down as you think of them.
    1. What is one thing you can do to help pay your bills on time or early? (Ex: Set up a repeating phone notification to remind myself to pay each month.)
    2. What is one thing you can do to keep your debt amount low? (Ex: Keep a low credit card balance by making my next 5 purchases with cash.)
    3. What is one thing you can do to improve your length of credit history? (Ex: If I’m not building credit yet, start building it with regular small, responsible purchases. If I already have a credit card, refrain from opening another one.)
    4. What is one way to use inquiries in your favor? (Ex: If I’m planning a big purchase like a car or home, don’t initiate any credit inquiries so I can keep my score as high as possible.)
    5. What is one way to improve your mix of credit? (This one is a bit tougher – although it’s good to mix revolving loans like credit cards with term loans like home or auto loans, you should never take out a loan just to improve your mix of credit. This category also has the smallest impact on your credit score at 10%.)

 

To build or rebuild credit, consider a secured credit card.

  • If you want to start building credit but are not sure how to start, or if you want to rebuild poor credit, a secured card is a great option. With extra security measures in place, it will help keep your funds and your credit score safe.
  • Consider applying for Unitus’ Secured Visa Card. The secured card will make sure that you always have more money in savings than you can spend with your credit limit. It is a great way to help build the habit of using credit responsibly.

 

Stay updated on your credit for free with this helpful trick.

  • In a nutshell: you have free access to 3 different credit reports each year (one from each credit bureau). Pull a different report every 4 months and you can stay updated on your credit year-round.
    1. Obtain a credit report from Equifax today at annualcreditreport.com.
    2. Set a calendar event and/or phone notification 4 months from today to obtain your Experian report from the same site.
    3. Set another notification 8 months from today to obtain your TransUnion report.
  • This way you can use all three credit bureaus to stay up-to-date year-round for free.

 

Pay it forward.

  • You’re saving, you have low or no debt, and you’ve built a strong foundation for financial well-being. Now share the wealth!
  • All of us know someone who could use a boost with their finances. It might be an immediate family member, cousin, niece/nephew, friend, bowling partner or anyone else we spend time with. With the resources from the last four weeks at your disposal, reach out to one person and use your knowledge to help improve their finances. This can be especially helpful for:
    1. A growing child who needs to start thinking about building credit
    2. A recent college graduate trying to figure out how to deal with student loans
    3. A friend or family member who has had money problems in the past
    4. A friend or family member who hasn’t had any money problems, but was never taught these ways to improve their credit score. (If they can improve their score, they will save money on monthly payments!)
  • If you are comfortable, start a dialogue with them and let them know how the tools from this 4-week challenge can help them improve their finances. Send them a link to the Challenges page to explore on their own timeline.
  • Personal finances can be a sensitive subject, but avoiding them can lead to bigger issues down the road.
  • If successful, you will feel the joy of helping a member of your community become wiser and better positioned for the future.

Week 4 Challenge: Credit

for Those Looking to Improve their Credit

Congratulations on making it to the next step of your financial challenge. If you are committed to changing your future, there is nothing that can stop you.

This challenge relates to last week’s Debt challenge, which called on the savings and budgeting techniques you practiced in Weeks 1 and 2.  To improve your financial well-being, you will need to combine these skills. It doesn’t work just to do one by itself.

Since your credit score is below the “Excellent” boundary (740 or above), we’ll look at some things you can do to improve your score in the short and long term.


Read the suggestions below. After you have completed one or more of these items, email DrWisely@unitusccu.com, include “Completely Credit Confident” in the subject line and tell me of your success. This will earn you a chance to win $500!*

How do you build great credit? Follow the tried and true formula. The biggest key is getting into good habits (sound familiar?). Follow the guide below and you will be on your way to cultivating commendable credit!

Check your credit report for free.

  • Understand what lenders see when they view your credit history.
  • Visit annualcreditreport.com to request your free credit report. You are allowed to obtain one free credit report from each of the three credit bureaus every year.
  • By staying up-to-date on your report, you can dispute errors which can help raise your score.

 

Review your credit report for errors. Take action if needed.

  • Your credit report has a big impact on your financial life. Sometimes your report has errors that unfairly lower your score. Check for these common sources of errors and learn how to dispute them if necessary:
    1. If you have debt collections on your report, consider sending your creditor a goodwill deletion request letter. This will remove the negative hit on your report, improving your score.
    2. If you see any inaccuracies on your report, file a dispute with the credit bureau. Did you know that after you file a dispute, the credit bureau will contact the information source and if the source does not respond in 30 (or sometimes 45) days, the information will be removed from your report? This can be a quick way to increase your score.

 

Learn the 5 things that make up your credit score.

  • This is the blueprint for your success with credit. Knowing what makes up your credit score will help you figure out how to improve your score.
  • Visit our page chock full of information on your credit report and credit score.
  • We encourage you to do more research about your credit score, and visualize the components in new ways. If you are a more visual learner for example, think about it like this stylized pie chart from myFICO.

 

Write down 2 ways to improve each part of your credit score. 

  • For each question below, grab a pen or pencil and anything to take notes on. Actually write the answers down as you think of them.
    1. What are two things you can do to help pay your bills on time or early? (Ex: Set up a repeating phone notification to remind myself to pay each month.)
    2. What are two things you can do to keep your debt amount low? (Ex: Keep a low credit card balance by making my next 5 purchases with cash.)
    3. What are two things you can do to improve your length of credit history? (Ex: If I’m not building credit yet, start building it with regular small, responsible purchases. If I already have a credit card, refrain from opening another one.)
    4. What are two ways to use inquiries in your favor? (Ex: If I’m planning a big purchase like a car or home, don’t initiate any credit inquiries so I can keep my score as high as possible.)
    5. What are two ways to improve your mix of credit? (This one is a bit tougher – although it’s good to mix revolving loans like credit cards with term loans like home or auto loans, you should never take out a loan just to improve your mix of credit. This category also has the smallest impact on your credit score at 10%.)

 

Make an action plan for your two biggest areas of improvement. 

Combine your ideas above with the habit-creating principles you learned from weeks 1-3 and make a plan to improve the key areas holding back your score right now. You don’t need to do everything at once, just focus on the big ones and you’ll see improvement.

  • Pay on time. The most important part of your credit score is paying bills on time. If this is an issue for you, make a plan now using the ideas you had above. Set up a phone notification, put up post-its around your house, change your phone background to an image that reminds you to pay on time – whatever it is, make the change! It will be worth it.
  • Lower your balance. Maxing out your credit cards? Did you know the ideal “utilization rate” for your card is 30% or lower? That means if you have a credit line of $1000, you should keep your balance at $300 or less to improve your score. Use the tools from weeks 1-3 to help make a plan.
  • Say “no” to retail offers. When shopping retail, do you say “yes” when they offer a store card? Saying “no” allows you to hit two birds with one stone. (Avoid inquiries and extend your average length of credit.)

 

Stay updated on your credit for free with this helpful trick.

  • In a nutshell: you have free access to 3 different credit reports each year (one from each credit bureau). Pull a different report every 4 months and you can stay updated on your credit year-round.
    1. Obtain a credit report from Equifax today at annualcreditreport.com.
    2. Set a calendar event and/or phone notification 4 months from today to obtain your Experian report from the same site.
    3. Set another notification 8 months from today to obtain your TransUnion report.
  • This way you can use all three credit bureaus to stay up-to-date year-round for free.

 

Pay it forward.

  • You’re saving, you have low or no debt, and you’ve built a strong foundation for financial well-being. Now share the wealth!
  • All of us know someone who could use a boost with their finances. It might be an immediate family member, cousin, niece/nephew, friend, bowling partner or anyone else we spend time with. With the resources from the last four weeks at your disposal, reach out to one person and use your knowledge to help improve their finances. This can be especially helpful for:
    1. A growing child who needs to start thinking about building credit
    2. A recent college graduate trying to figure out how to deal with student loans
    3. A friend or family member who has had money problems in the past
    4. A friend or family member who hasn’t had any money problems, but was never taught these ways to improve their credit score. (If they can improve their score, they will save money on monthly payments!)
  • If you are comfortable, start a dialogue with them and let them know how the tools from this 4-week challenge can help them improve their finances. Send them a link to the Challenges page to explore on their own timeline.
  • Personal finances can be a sensitive subject, but avoiding them can lead to bigger issues down the road.
  • If successful, you will feel the joy of helping a member of your community become wiser and better positioned for the future.

 

Want to become more Credit Conscious?

We have a secret weapon – our Credit Commanders, who dedicate themselves to helping people build excellent credit. If you are ready to more consciously cultivate good credit, fill out the boxes below and a Credit Commander will reveal themselves to you. It could change your life for good. Click here to get started.

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