The first thing a person should pay off is “financed loans” which have a negative impact on their credit score. Specifically, these are loans where payment has been delayed more that 30 days (“No Payments for 6 Months”). These loans negatively impact your credit score and should be avoided at all cost.

Contrary to popular belief, merely paying your bills on time will not ensure great credit. Other factors such as the number of credit cards you have and the balances outstanding on those cards have a direct impact on your credit score. Be certain that each credit card has a balance less than 30% of the card’s credit limit. If you have a credit card where the balance is more than 30% of the credit limit, use a portion of your tax refund to pay down that balance to below the accepted utilization rate.

More than 100 million people have a FICO score of less than 720, which means they are overpaying on their mortgage, car, and credit card loans. Many consumers are not even aware they are overpaying, instead believing that they are being charged “market rate” and not a higher interest rate based on a low FICO score. Every American should check their FICO score bi-annually as the score is used to determine their mortgage interest rate, auto loan interest rate, auto insurance interest rate and may also affect other areas of their life.

The first thing a consumer should do to understand their financial health is to be aware of their FICO score, not the consumer score that is generally released by the bureaus with the credit report. While every consumer should review their credit reports regularly to check for errors, the consumer score released with most credit reports is of less value than the lender’s score.

Following the above steps will create a stronger economic foundation for the future. Know where you stand with your credit score, avoid finance loans and be certain the revolving balances on each credit card you have is below the standard utilization rate to improve your future finances.

About Philip Tirone:

Philip’s book “7 Steps to a 720® Credit Score” dispels the misconceptions around our credit scoring system and guides consumers who are struggling with Bankruptcy, Foreclosure, Short Sale, Divorce, and many other experiences that impact a person’s credit score.
Philip and his programs have been featured in the LA Times, the Wall Street Journal, and the San Francisco Chronicle, among others. Additionally, Philip has been a frequent guest lecturer at UCLA Anderson School of Business and Management.

Contact:
Danielle Fairlee, DSF Communications
Danielle@dsfcommunications.com
(818) 346-7110