How I got my 716 credit score

716 

These days I say my credit score with pride but I remain humble because less than 16 months ago I had no credit and didn't truly know what it was. This time last year my credit debt was building up. The truth is that I got a taste of the addiction lifestyle of living on credit. I was 5 credits in and it still didn't seem like enough. Then like an Angel my high school teacher Ms.Daley paid for my first financial class. Every Sunday I went to the one of a class at a church on top of a hill in Bel Air. By the 4th class I was convinced to cut and close every card I had and started my financial education of getting my hands on everything that taught me about how to rebuild credit score.

HOW I PAYED OFF 3/5 credits so far. Debt snow ball. 

Line up all your credits from smallest to largest.. Put all the extra $ you made towards lowest until you pay it off. When you pay off lowest then use that old minimum and add the money that would be used to pay the credit to the next lowest credit.

All the mistakes I have made, have turned into lessons learned.

*im not financial expert but I am a sponge and I'm learning everything I can about financials. Don't take my word study and learn about credit yourself but here are my tips. 

•ALWAYS pay the minimum on time.. But If you can pay more than the minimum, pay more. Creditors make $ off of interest, the longer you take to payoff balance the more interest you will pay on the money.. 

I was paying 19% interest so that means for every $100 dollars I was paying 19 dollars just to borrow it. 

•Don't use more than 30-50% of the credit limit. Example if the creditor gives you $100 don't spend more than $30-$50 of the 100. 

•Don't open to many credits at a time and don't allow businesses to run your credit score. 

-If I could do it all over again knowing what I know now.. below is what I would do (This is also what I will recommend to my little sister if she asks how to build her score or to anyone who has no credit at all.) 

1. First thing I would focus on learning to manage my own money. I came into a problem using credit because I didn't fully grasp how to manage my own money.. So borrowing more money made it worst. 

2. Save enough to get a secured credit card. What a secured credit card allows you to do is to build your credit with your own money. It is not a debit card but a secured credit, the difference is the secured allows you to build you credit score. 

3. Then when I learned how to manage and budget my own money and use my secured credit well I would apply for a credit card.. Either use it for expenses such as gas or emergencies and pay the amount back each month. Or I would only use the borrowed credit to build assets that bring money back into my accounts and not liabilities, things that depreciate in value after you buy them.  In the words of Tom G "invest in something." Use the credit to invest into yourself by getting a new skill or education something that will benefit you and your family. 

SN: the reason the average person gets into debt is because they have no financial education and because they buy things they don't need. I will recommend to anyone who doesn't want to make the same mistakes I made to get a few books and watch a few videos on what a credit score is compile of and learn to use it to your advantage. 

Money Wasted Last Year

                            How I started savings for the first time in my life.  

    Last year I wasted a lot of money. This new year I was determined not to do the same. I got introduced to a financially advisor last year in my sociology class and i kept in contact with Ms.Jen(name change) for awhile before we lost touch. But some of the things that she taught me stick with me to this day, earlier this year I started back up  some of her tools. The most helpful for me was the idea of recording ALL of my expenses.

    When I started back up I was able to see what I wasting my money on; a lot of clothes, candy bars, and just a lot of the things i could do without if i wanted better spending habits. 

Now unconsciously I always think about every purchase. It’s like this, I’ll see a dress in Angl that i want but then i’ll say that I can put that money into my savings account instead and watch it grow. So it turns into a no on the skirt. 

                                                Where my money goes?

    EVERY single source of income that I receive goes into the six categories below.  It’s something I learned at a seminar by Peak Potentials called Millionaire Mind Intensive. Where I learned that before you can have the right to want anymore money in your life you have to learn to manage whatever you have now to the last cent. It’s why there are millionaires living pack check to paycheck. Everyone no matter who you are have to learn how to manage their money well. 

Example: My imaginary $100 bill.

10 % Play Account = $10

Play Account, once a month everything in this account is to be spent on something nice for yourself. 

10% Education Account  =$10

On things that are seen as educational in your eyes. For me this is books, a kindle, or anything that helps me better myself through knowledge. 

10% Give Account =$10

Give account, is where you give it all away to someone/thing other than yourself, and if you think about it, the give money is giving away through holidays and birthdays gifts throughout the year anyway.

50 % Necessities Account =$50

Essential expenses that you can't function without, if you feel like you barely have enough already for this account its time to reevaluate where all your money is going by recording all of your expenses. Maybe cut back on some of those McDonalds trip, and eat at home more if thats one of your problems. Find your spending weakness. 

10% Long term savings Account =$10

This account is for unexpected expenses, or saving up for a big item, or even vacation.

10%Financial Freedom Account =$10

This account is the account that you don't ever take anything out. And my suggestion when it gets up put it a interest bearing account. Talk to someone at your local bank about it. 

    *I am no financial advisor, I am only sharing some tools that i have learned and applied to my own life that have worked for me. I’m not saying that the system will work for you, but it is worth the try if you want to make chances in your own personal finances. Even if finding another system to try other than the one above, because if you change NOTHING, NOTHING will change.