Lorenzo Frias has specific financial goals in life, including buying a better car and buying his house someday.
But it all came to a glaring halt when he discovered his credit wasn’t very good. In fact, his credit was so poor that he couldn’t even get a credit card — let alone a car loan or a mortgage, which is much more difficult to get than a credit card. It turned out that his goals were out of reach.
What was his credit score? “It was 523, to be exact,” he says. “Honestly, it was too bad.”
Late payments to his American Express card largely destroyed his credit. Your credit score is like your financial footprint, and a score below 600 disqualifies you from most loans or credit cards.
Frias puts it frankly.
“It’s embarrassing,” he says. “I realized there were definitely a few things I had to address.”
That’s when it was found sesame credit, a free website that helps people better manage their credit.
His goal was to raise his credit score to 700 by the time he turned 24, which is about to expire. More than a year after joining Credit Sesame, he’s about to turn 24, and his credit score is 691 – a huge improvement. *
How could he increase his score by nearly 170 points? 1 By following the site’s tips and using its free tools. Now he is about to rent a better apartment, and he is planning to buy that car and the house of his dreams.
How your credit affects your life – and how you can raise your score
Your credit score isn’t just a meaningless three-digit number. It affects large parts of your life, such as where you live and what you drive. The higher your score, the better deal you’ll get on big things like a mortgage, car loan, credit card, car rental, or apartment lease.
Like Frias, 60% of sesame credit Members see an increase in their credit score; 50% see at least a 10 point increase, 20% see at least a 50 point increase after 180 days
With his shiny new credit score, Frias just signed a lease for an apartment in the San Francisco Bay Area. He’s moving there from Los Angeles with his girlfriend and their two dogs, so he can live close to work. Like many of us, he’s been working remotely, but that probably won’t last forever.
Getting the lease agreement approved was not a problem. “I had flying colors across the board,” Frias said. “I was really happy to see that.”
He’s been driving what he calls a “little bucket” – an old Honda Civic he’s been working on, although it needs a new ignition and is likely on its last legs. Now he is in a position to change that.
He’s managed to collect his savings and says he’s waiting to see what happens to car prices that fluctuate insanely.
As for buying a home, the Federal Housing Administration has pre-approved it for a $760,000 mortgage. “So there’s something to look forward to – I can buy a house.”
what is the secrete?
So how did Frias raise his credit score by 168 points? 1 What is the secret?
when you Sign up with Credit SesameAnd It instantly shows you what your credit score is. It shows you why you’re getting the result you’re getting, and gives you personalized tips to point you in the right direction.
If your balance is bad, it will show you the steps you can take to help fix it. If it works well, it will show you ways you can improve it. And if it’s excellent, she’ll show you how to keep it that way.
It will also show you if there is an error on your credit report that is holding you back. (One in five reports has an error.)
Following Credit Sesame’s advice, Frias took the following steps:
1. Loan Credit Generator
He took out a $1,500 building credit loan that I would recommend. It is a loan specifically designed to help you build your credit. You borrow money, but the bank keeps that money until you pay off the loan.
Every month, you make small payments towards the loan. These payments are reported to the three credit bureaus. They see you’re making payments, and your balance starts the opposite.
Once you pay off your loan, you get all of your payments back, minus a bit of interest. So I started hoarding a little savings.
2. Secured credit card
Frias got a secured credit card that was recommended to him. This is useful for people who cannot qualify for traditional credit cards. It is similar to a debit card. Once you make a deposit, you can use that amount in credit. But unlike a debit card, a secured credit card lender reports your payments to credit bureaus so you can establish a credit history.
3. Other credit cards
Once his credit started to improve, Frias applied for traditional credit cards. It can actually help your credit score get credit that you don’t fully use.
The percentage of the total credit limit you use is one of the factors that your credit score depends on, along with your payment history, length of credit history and credit diversity.
Frias and his partner share a number of different credit cards that they use for different purposes.
“I always pay my credit card bills every month,” he said. “I do not leave an unpaid balance.”
4. Opposition to negative elements
Once you review your credit report, you can dispute some of the negative signs pulling you down. Objection letters are sent to the three major credit bureaus: Equifax, Experian and Transunion.
Frias had a company called Lexington Law do it for him, but he soon decided it was too expensive and started doing it himself.
“Until then, I didn’t know I could send a letter to the credit bureaus myself,” he said. “Once you realize that the power is in your hands, you can go ahead and do the same things they do.”
We do much better
Now that Frias has a better credit score, he and his girlfriend are packing for a move to the Bay Area.
“We’ve got a U-Haul order for the end of the month,” he said. “I recommended Credit Sesame to my girlfriend, and it also helped her. Financially, we do a much better job.”
Mike Brasfield ([email protected]) is a featured writer for The Penny Hoarder. He is a member of Credit Sesame and finally has a credit score of over 700, woo hoo!1
1 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10 point increase, while 20% see at least a 50 point increase after 180 days.
2Credit Sesame does not guarantee any of these results, and some may see a drop in their credit score. Any improvement in score is the result of many factors, including paying bills on time, keeping credit balances low, avoiding unnecessary inquiries, proper financial planning, and developing better credit habits.