Improve Your Credit

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Toddlers

• Teaching delayed gratification at this age will serve a child their entire life. Once example: “You can have one cookie before we go to the store…or two when we get home.”
• One simple way to teach the importance of savings and setting goals is to give your child a piggy bank and watch it grow. Set a goal for getting a new toy and allow them to ‘save’ for it. Celebrate together when they can buy it from their own money.

Kids

• Keep up with the piggy bank
• Allow them to have control over a certain amount of money.
• Allow them to run out of money …and suffer the consequences (no movie, no new toy)
• When they ‘need’ money, ignite their entrepreneurial spirit…allow them to come up with ways to make it.

Teens

• Have your teen on a budget/allowance. You may want to consider a prepaid debit card with no (or very low) fees. Have your teen agree with the budget. They will be thrilled with having a “card” with their name on it. Invariably, they will run out of money before they run out of month. Allow them to suffer the consequences or to come up with ways to make more money. When it is “their” money they magically become more responsible and more cost conscious
• Understanding debt. Your teen is with you when you use your charge card. Have them sit with you when you have to pay the bill.
• Have your teen start participating in “giving back”. They will grow more appreciation for what they have when they start helping those less fortunate.
• Encourage your teen to get a part-time job, on the weekends, evenings or over holidays. This will teach them to budget their time as well as their money…,both very important skills needed to become successful.

High-school seniors and College students

• In addition to the items above it is time to start building your credit…in a positive way by:
• Open a checking and savings account
• Apply for a student credit card (and use it wisely…paying it off each month)
• Become an authorized user on a parents card (in some cases this helps you start building credit)
• Financing a car or other installment (requires monthly payments) loans in their name with a co-signer
• Have the high school senior teach younger siblings or children about money and credit cards. The best way to learn something is to have to teach it. It will build their self esteem ..and the younger children will be thrilled to have the older one paying attention to them!

College students

Young professionals – Now that you are entirely on your own…it is very important to understand your credit score, how it is calculated and what will help it…but more importantly what will hurt it. It can drop quickly but getting it to rise may take longer than you realize.

Understand what impacts your credit:

• Payment History: Do you pay on time?
• Amount Owed vs. Amount available: Are you maxed out or do you have credit available to use?
• Length of Credit History: How long have you been using credit?
• New Credit & Inquiries: How many times does your credit get looked at by lenders?
• Types of Credit: Home Mortgage, Car Loans, Credit Cards, etc.

 

Tips to Raise Your Credit Score:

• Get a copy of your credit reports and correct any errors
• Ask for higher credit limits and keep no or low balances

–This will improve your amount owed vs. amount available ratio by increases the amount

available.

• Pay down over-the-limit cards until they are within limit
• Begin paying cards off one at a time

– Keep them open (so it helps your amount available)