How I Ruined (& Fixed!) My Credit Score

As you may have already heard, I recently ruined my credit score. I was using Borrowell to monitor it for free, and after 3 months of it going down, I finally checked to see what was going on.

Luckily, the loss of more than 150 points to my credit score was due to a small error that was fixed even faster than it happened. But for those months that I watched it nosedive off a cliff, I experienced some SERIOUS financial stress.

Want to know where you stand? Request your free credit score & credit report from Borrowell HERE!

Now that my score is fixed, I can rest easy… and never go a single month without checking it ever again.

Why is your credit score important?

Your credit score is more or less a risk assessment of how good you are at managing debt.

Lenders use it to determine if you’re going to be a borrower that pays them back or not. Bad scores flag you as high risk, suggesting that you may not be reliable for paying your bills in full or on time, whereas good scores identify you as low risk and suggest that you’re likely to meet your financial obligations when they’re due.

The weird thing is, the more debt you carry, the more likely you are to have a good credit score, even if you have no cash left over after you make your minimum payments on everything. Alternatively, you can shun debt and live super fiscally responsibly by paying only cash for everything, and your credit score will be poor.

You don’t really want to be in either situation. What you really want is to have great financial habits AND a good credit score — and it’s totally possible.

Keep track of your credit score

You can’t improve your credit if you’re not monitoring it. Thankfully, you can receive both your credit score and your full credit report for free from Borrowell, the website I’m using to track mine. This is considered a “soft hit” on your credit report, which means it will NOT affect your score!

Borrowell emails me my updated score each month, as well as a summary of how I’m doing month to month.

Prior to this, I never checked my credit score. I didn’t care what it was! I did, however, get my credit report once per year. This was great, responsible behavior, but it also meant it could take me as long as 12 months to catch an error. Now that I see my score on a monthly basis, I know right away if something is wrong — and now I can find out exactly what it is just as quickly.

And Borrowell has just released a super fun commercial about the fact that you can check your score anywhere! Click here to watch the 30-second spot.”

Get your credit report

When I had my $0.66 mishap, I had only been subscribed to Borrowell’s monthly credit score update. When I wanted to figure out why my score was tanking, I ordered my full credit report the tedious old-fashioned way: by submitting an application with a photocopy of my driver’s license to a credit reporting agency, then waiting 2-weeks for my paper report to come in the mail. This was both inefficient and highly anxiety-inducing.

When my report finally came, I had to go line-by-line through pages until I found the reason things were awry. I was expecting to have to do it all over again to verify my score had been fixed, but before my 30-day waiting period was up, Borrowell actually started offering free credit reports. I used this instead!

If it weren’t for the risk of identity theft, I’d post a screenshot of my entire credit report here because on Borrowell, it’s beautiful. It wasn’t the 10-pages of tiny type font I was used to! Instead, was a clean summary of exactly where I stood with my past and current accounts, each of which I could expand if I wanted more details

Futhermore, at the bottom of the report, it also had a section that would identify if anything was in more serious trouble, like in collections, or if I was recovering from a bankruptcy.

Needless to say, reading my credit report this way was easier on the eyes, and having access to it instantaneously was 180% better than the old snail-mail method I’ve been using for the past decade.

How to increase your credit score

I’ve done many other blog posts and YouTube videos on this topic, because it’s always a popular request.

RELATED POSTS:

• 5 Easy Steps to Build Good Credit
• How to Hack Your Credit Score

I won’t re-state the tips and strategies I’ve said before, but I DO want to add a few new hacks to the mix:

• Monitor your credit! If you know your credit score, you know how far you have to go to get it to “Excellent”.
• Stop applying for more credit! Every time you apply for a new credit card or loan, this counts as a “hard inquiry” on your credit report and can lower your score. These inquiries stay on your credit report for 3 to 6 years!
• Be patient! I say this all the time, but at the end of the day it really is one of the most important aspects of increasing your score. If you’ve made financial mistakes in the past or you haven’t had the chance to have a mortgage before, give your score time to increase. As you continue to pay your bills and diversify the types of credit you have, your score WILL go up!

Remember to stay away from companies charging you for credit monitoring or credit repair. Getting your credit score and your credit report is FREE, so you should never have to pay for it. Furthermore, credit cannot be “repaired” or “fixed” for a fee — the only thing that will fix bad credit is good financial behavior and time!

Acheiving perfect credit isn’t easy, but if you manage your money and debts well, it will happen all on its own.

This post was sponsored by Borrowell, but the opinions and experiences expressed in it are my own.