Happy Monday everyone ,
Let’s talk credit scores ; It feels like this mysterious number that controls way too much of our lives, right?
Here’s the thing - your score is made up of 5 factors, but the two that matter MOST are:
∙ Paying on time (35% of your score)
∙ How much credit you’re using (30% of your score)
Everything else? It matters, but not nearly as much.
What’s the biggest challenge you face when it comes to managing your credit? And if you’ve figured out a strategy that works for you - share it!
Maybe you set up autopay? Use calendar reminders? Have a system for tracking your spending?
Drop your challenges AND your strategies below
For me, the hardest part has been how much credit I’m using. I didn’t realize how big of an impact it had until it had already affected my score
Now I’m more intentional about keeping my balance below 30%, but I’m curious now. how long does it usually take before your score starts improving once you do that?
Setting up direct payments for most of my bills has been a game changer and a huge stress reliever. I only use my credit card, I don’t even know where my physical debit card is lol. I set a weekly spending amount for myself and then make one big credit card payment at the end of each month.
Credit utilization was the hardest concept for me to grasp. Once I focused on when balances are reported and not just paying in full - things finally clicked
The hardest part is having debt in a bunch of different places, and never knowing where anything is at. Would be nice to be able to have all my debt in one place!
If you made payments that reduced one of your account balances and your overall credit utilization, that should reflect on your credit score the next time that credit provider reports to the credit bureaus. Some creditors do it at the start of end of each month and others do it when issuing the monthly statements. So depending on when you make your payment, you should see the updated balance in your credit reports which would then reflect in your scores within 5 weeks or less.
@jla739 Welcome to the Neo community. Glad to have you here
Happy to hear you learned something valuable. We have more content coming on understanding credit, and we hope you’ll find it insightful.
What WASN’T working: Thoughtless spending. Those coffees you could make at home, but don’t. The lunches or snacks you grab on a work break that you don’t really need, but get anyway cause…it’s 2pm…you deserve a little boost. All of that adds up. And before you know it, you’ve spent $$ but with nothing to show for it.
What’s WORKED for me: Monthly check-in with our budget (be honest, or it doesn’t work) Modify your spending—you can still have that 2pm treat or coffee outside…but if it’s daily, make it a goal of only 2 times a week? Then adjust as needed. 24hr rule: Give it 24hrs on purchases that aren’t budgeted. If you’re not thinking about it after 24hrs, you prob didn’t really need it. Use cash—it makes you feel the spending differently. Rinse + Repeat
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; It feels like this mysterious number that controls way too much of our lives, right?
Monthly check-in with our budget (be honest, or it doesn’t work)
Modify your spending—you can still have that 2pm treat or coffee outside…but if it’s daily, make it a goal of only 2 times a week? Then adjust as needed.
24hr rule: Give it 24hrs on purchases that aren’t budgeted. If you’re not thinking about it after 24hrs, you prob didn’t really need it.
Use cash—it makes you feel the spending differently.
Rinse + Repeat