I know travel is not an option now but will be in the future. I think now is the perfect time to get your finances in order and start planning for your dream vacation.
We talk about all things travel on this website which is no cheap hobby, but I never advocate going into debt and ruining your credit over it. We all want to become master travel hackers and stay in exotic hotels, but at what cost?
I want to start from the basics – before we start applying for credit cards and loans to fund our dream vacation or new travel blogging business, let’s talk about credit scores. The very reason those companies will either approve or deny you.
But what exactly does that mean? So, I thought this would be a good time to drill down on what good credit is and how to work to improve it using Lexington Law Firm’s services. In my experience, bad credit will cause frustration in your life. In order to adequately paint this picture, I want to share my personal journey on building good credit.
CLICK HERE to kickstart your credit repair efforts with Lexington Law Firm.
Let’s rewind to 20-year-old Allison. Further back actually, to high school Allison when I got my first job. My mom always stressed the importance of saving money, paying your bills on time and if nothing else, ALWAYS maintain good credit. So what did I do through the years? Well, I climbed into credit card debt, walked out on a job and thought not paying my bills would make them go away. That ended with my incredibly not-so-happy mother bailing me out.
However, the real lesson came in 2012 when I caught the travel bug. Europe was calling my name but my bank account said absolutely not. My credit cards said absolutely not. Ironically I was also earning a degree in Finance at the time, yet had no real concept of budgeting my money. I knew if I was to make this trip of a lifetime happen I needed to get serious about saving. With some help, I managed to create my first ever budget and rebuild good credit.
I kid you not, my spending for the first month on this new budget was $63. That kicked me out of the red and helped me see what was possible if I stuck to a budget and stayed out of debt.
Since then I have achieved excellent credit and been approved for rewards credit cards that earned me tons of free travel including a round-trip business class flight to Singapore. I no longer carry credit card debt but rather use them to earn points towards free travel.
My financial goals now include purchasing a vacation home. I have always wanted a vacation home and now I am finally ready to start working towards making it a reality. I want to get the lowest possible interest rate. 850 FICO score here I come!
I also want to keep traveling, which means I need to keep saving and looking out for new rewards credit card offers that will help me earn free travel. Of course, none of this will be possible if I let my credit score dip.
What is a FICO credit score and how is it calculated?
Your Fair Isaac Corporation (FICO) credit score measures your risk to issuers of credit. It gathers your credit files from all three credit bureaus TransUnion, Equifax, and Experian and calculates a score between 300-850. Factors they look at to determine your score: on-time payments, length of credit history, credit utilization, recent inquiries, new accounts, and available credit.
This score tells a lender whether or not you’re reliable. Typically, the lower the credit score, the higher the interest rate and/or required down payment. The higher the credit score, the lower the interest rate (sometimes 0% interest rate) and/or little down payment.
How to get credit
If you’ve never had a loan or credit card chances are your credit score is 0. That’s neither good nor bad – it’s just non-existent. Here are a few ways you can go about establishing credit:
- Become an authorized user on a credit card. When my little sister had no credit, I added her as an authorized user to help her establish a credit history. I never gave her the card but simply by being an authorized user, she was able to establish credit history. I don’t recommend this for just anyone. Only do this if you are married, or in my case, helping the family. Never hand over your credit card – even to family. If they fail to pay, that’s your responsibility.
- Get a cell phone plan and pay it every month. Essentially, any business that reports to the credit bureaus will count towards your credit score.
- Get a secured credit card. These are basically pre-loaded credit cards. You load the cash and that’s your credit limit. It’s up to you to reload what you spend every month.
How to improve credit
- Stop thinking credit cards are free money. Never carry a balance over 30% of your total limit and pay it off every month.
- Use Lexington Law Firm’s Credit Repair service. Lexington Law is a consumer advocacy law firm with over a decade of experience helping hundreds of thousands of Americans take steps to improve their credit. Many people have inaccuracies on their credit report and never know it. Lexington Law Firm will provide you with the help and tools to educate you on your rights along the way.
The benefits of using Lexington Law Firm’s Credit Repair services
Just like hiring a CPA to help with your taxes, you would want the same kind of professional to help you uncover reporting mistakes, fight for your rights, and help you build good credit.
The great thing about Lexington Law Firm is they are an actual law firm who can dispute inaccuracies (if any) on your credit report. I don’t know about you, but when I come to a dispute I would rather have a trusted law firm backing me.
They will use their years of experience and in-depth knowledge of the credit repair process to fight for you because they believe you have the right to accurate and good credit.
Everything shared with you today is based on my personal experience and insight I’ve gained over the years. If you are serious about building good credit you should without a doubt contact the professionals at Lexington Law Firm and let them help. From there, you can start to explore the world of travel hacking.
Lastly, I want you to know you are not alone. There is no shame in asking for support. When I started my credit repair journey I told everyone. Being vocal about my financial goals helped me achieve them faster because many of my friends were down to find budget-friendly alternatives for entertainment or equally interested in doing the same thing.