The Credit Score Blueprint: Strategies and Secrets to Raising Your Credit Score by Brian Anderson 

These were my favorite passages from this book about how to improve your credit score.

“Beware of little expenses; a small leak will sink a great ship.” Benjamin Franklin 

“Debt collectors employ a wide variety of methods to make their money back, which often involves frequent, intrusive contact. They are well known for making debtors’ lives difficult, which can lead to a huge increase in the amount of financial stress you are facing, especially if you remain unable to completely pay off your missed payments.” 

“Applying for Multiple Lines of Credit at Once As we have already mentioned, applying for too many credit lines can negatively impact your score because each new application does its own credit check. Continual checks to your credit score suggests a desperation for credit that goes hand in hand with an inability to make adequate payments on currently existing accounts. If you already have a few credit cards, there is little reason to open more unless you cannot afford to pay the current balances without making any new purchases on credit.” 

“Unfortunately, mistakes do happen, and they can be the cause of great grief more often than you may assume. In fact, “26% of participants in a study by the Federal Trade Commission (FTC) identified at least one error on their credit report that could make them appear riskier to lenders.” (myFICO, n.d., para. 2) This is a startlingly high number, especially if previously you simply assumed everything on your credit report would be correct. Double checking your report is a great way to start turning your credit score around and make sure you are only losing points for problems that actually exist.” 

“Repairing your credit starts with making changes to the way you view and interact with your finances. If you continue to put things off, leave debts to pile up, and generally treat your credit like a secondary issue, it will continue to grow worse. You want to shoot for long-lasting changes not just in the way you spend your money 

but also in the mentality you have when utilizing debt. If you are always looking to be conscientious about your score and your overall financial health, you will find it much easier to stick to making good credit decisions. However, intention is only half the battle; the other half is learning what to do and actually getting it done. 

As a general rule of thumb, target the big stuff first, and then move on to the things that are only having a minimal impact on your credit. 

If you can pay even $10 or $15 more on an account, you can reduce the amount of interest you are charged and keep future payments lower. 

“A good rule of thumb when using credit is to not purchase anything that you cannot pay off in two or three billing periods; this of course only applies to smaller purchases and does not apply to things like large loans, but it is a decent principle to follow when buying things at stores on your credit card.” 

“Maintain Low Credit Card Balances As we have previously discussed, using a large portion of your available credit hurts your credit score. It suggests a dependency on credit and an inability to pay off debts in a timely manner. To counteract this, you should try to keep the balances on each of your credit cards low compared to your credit limits.” 

“The first is that the fewer accounts that contribute to your credit score, the more impact any one debt has. If you have a debt that is balanced out by multiple accounts with very low or no debts, this is better than only having one card open but it is constantly in use.” 

“Keeping unused accounts open helps to balance out debts on other accounts. Additionally, unused accounts tend to be older ones, and getting rid of these could shorten the length of your credit report, thereby hurting your score as well.” 

“There is a common misconception that having too many lines of credit open at any one time can hurt your score, but truthfully this is not one of the main factors which will affect your score. In fact, it has nearly no impact compared to the alternatives of having a very short credit history or having all of your available lines of credit nearly maxed out.”

“Keeping old accounts does not require any further hard inquiries, and as a result you are free to keep cards open for as long as you like. You should actually prioritize leaving older cards open, as they will increase the age of your credit history and improve your score just by being open.” 

“but acquiring credit from multiple sources shows that you are capable of using many different kinds of credit successfully and that you understand how each type works. 

“Many people are hesitant to contact their creditors because they believe the terms of their loan or credit card are set in stone, but oftentimes this isn’t true. After all, creditors want to get their money back, so they are fairly likely to choose a slower rate of repayment or a lower total bill over you failing to pay back your debt at all, leaving them with a net loss and you with a suffering credit score.” 

“They can make suggestions to you, but it is still up to you to follow through with them. Also, many of their suggestions will be what we have previously discussed.” 

“Transferring balances to a zero percent APR card will keep interest from accruing, yes, but it does not wipe out the debts, and after enough time has passed the card will revert to its standard APR. If you do not pay these debts off within the zero APR time frame, you will simply get stuck with them again.” 

“Try to avoid cosigning for people you know to be financially stable or unreliable, as they are the most likely to default on their loans and leave you with the payments. So long as you are picky about who you agree to do this for, you can avoid a lot of the financial fallout associated with cosigning a loan.” 

Also keep in mind that should you apply jointly for a credit card or loan, both of your credit scores will be checked, and if one of you has a poor score it can complicate the approval process.” 

“One thing you can do to protect yourself is to have both separate and joint accounts. It’s okay to have one or two accounts in both of your names if you both contribute to them — for example a shared mortgage on the house you both live in — but you should also have a bank account and a credit card or two that are exclusively your own, especially in a new relationship.” 

“Living Within Your Means Learning to live within your means is a lifestyle change, not just a financial one. It means learning to determine which purchases are mandatory, which are not necessary but fine on occasion, and which are completely frivolous and worth getting rid of altogether. Your ‘means’ in this circumstance is dependent on your income and your debt burden, so what exactly living within them refers to will differ from person to person. Your answer to this question is also dependent on what your specific needs are.” 

“If you are not already doing so, you should try to save a small portion of your paycheck each month as a rainy day fund.” 

“Only buy what you actually need, and avoid anything that you might wear once or twice only for it to sit in the back of your closet for months.” 

“Also, remember that withdrawals from your retirement plan are permanent and you cannot return funds to the account, even if you do not use them. Still, a hardship withdrawal could be a good option for improving your income without sinking your credit score with loan applications. Check with the terms of your retirement plan to see if a hardship withdrawal is available to you and if your situation matches the qualifications before proceeding with this option.” 

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