On this edition of Stretching Your Dollar, AJ Ayers, certified financial planner and co-founder of Brooklyn Fi, provided some tips on how to boost your credit score. 

<div class="block">On this edition of Stretching Your Dollar, AJ Ayers, certified financial planner and co-founder of Brooklyn Fi, provided some tips on how to boost your credit score. </div>
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Wake Up With Cheddar

Stretching Your Dollar: Simple Ways to Boost Your Credit Score

Hello. Hello everyone. Welcome back to News and Baker and now time for stretching your dollar. I love when you meet the right man, you gotta know what it is, right? And credit scores can play a major role when it comes to qualifying for a home loan, a car, a new credit card with extra perks. But what should you do if your credit score is in the slumps and just needs a boost here to give us some tips and how to boost that credit score and get back on track. It. Certified Financial Planner and co-founder of Brooklyn F I AJ A welcome. A thanks so much for having me today. Let's talk about that credit score AJ how at the end of the day is it really sort of calculated? So the credit score is a little bit of a black box, right? There's these three bureaus that report your credit score and we have some idea of what goes into it. The two, the two major ones are your unit rate, which is how much credit is available to you that you're using. So how much are you borrowing? The other one is your payment history. Have you been a good borrower? Have you made payments on time in the past? Have you ever not made any payments? We call that a derogatory mark. So if you have any of those definitely want to take some steps to get rid of those derogatory marks on your credit score. So I think most of us know, but a good reminder, what is the impact of having a low credit score? Yeah, it's not great. Now, the big one I would say for most people is if you want to borrow money, like let's say you want to buy a house and you need a mortgage. If you have a lower credit score, you're gonna actually pay a pretty hefty premium for that. You're not gonna have access to those great rates. Um Another place could be a car loan. You want to borrow some money to buy a new car. You're gonna have to pay a lot more than someone who's got that higher credit score. So those are the two main ones. Sometimes jobs will check your credit score but really it's mortgages and auto loan. Yeah, and those all added things that you have to pay for. Just add up at the end of the day. So let's talk steps then to fix your low credit score. Is it just paying off your credit card? Is that important to sort of fixing that? It's as easy as that right? Just pay off your debts Right. Um, I think one of the, the best tips that I can offer is if you don't, if you're not able to pay off your debts each month, which I highly recommend you do. Right. Like paying down that credit card debt that you have. That's the easiest way to do it if you can't do that. Make those auto at minimum payments. Usually it's 15, 30 bucks through your credit cards. Just set up that automatic payments. You have to think about it. Like I said, the worst thing that you can do is accidentally miss a monthly payment. We get that nick on our credit score and that's going to hurt you in the long run. What about increasing your credit limit or closing credit cards you're no longer using? So those are two great ways um to, to boost your score, right? So we can pay down our credit, but we can also ask for more credit. So we keep our utilization lower, right? So we can call up our credit card company and say, hey, can I have a little bit more credit? They may grant it to you. They may not. So we increase the the borrowing power that you have. The other thing. Um, you know, we, we want to think about being a, having a nice long history of credit score, right? So if you've made payments on time for a long time from an old credit card, we don't want to close that card. We don't want to lose that really positive credit history showing. We're great borrowers. There's also always been this theory that closing your credit card, your credit score. Is that true? It does. So what, yeah, what it does is it, it basically shrinks your, your age. So your credit age is, how long have you been borrowing? How long have you been making those payments? So, if you have an old card that's open in college and you close it, we're actually gonna lose all those years that you were making those payments. Can we talk about the importance of paying other bills on time? Like utility bills, for example? Yeah, those are super important because if you don't um or you never pay those bills, uh some of the those uh lenders or, or companies can actually report to the credit bureaus and say, hey, you didn't pay that off. So I'm gonna your credit and those are called derogatory marks. So if you have any of those that are, you know, small amounts highly recommend paying just paying those bills off, actually getting a letter in writing that says they're gonna report your payment to the credit bureaus so we can get that off your credit score, right? Great advice. Thank you to certified financial planner and co-founder of B K F I AJ. Thank you so much.