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How to improve your credit score


Note to subscribers: I’m taking some vacation over the next two weeks to spend some quality time with my family. The newsletters will return as of Thursday, June 28.

Have you had “The Talk” with your children?

And no, I’m not talking about the birds and the bees. I’m referring to a discussion that is just as important and one a lot of parents also avoid.

I mean, have you told your children what a credit score is and how to be sure they get a good one?

It turns out a lot of parents haven’t discussed this important money issue, according to a recent credit outlook survey by Chase Slate.

Only 32 percent of parents, who the survey found have a great amount of financial influence over their children, have explained what a credit score is.

It’s a big financial mistake not to learn how to get and keep an excellent credit score, which directly affects how much you pay for the money you borrow. Your credit score also influences your insurance rates, being able to get an apartment or even a job.

So let’s talk about this.

What is a credit score?

Your credit scores help companies determine how much of a credit risk you may be. The scoring models try to predict how likely you are to repay your debts. The higher your score, the more likely it is that you will pay your bills as promised.

Read more: Understanding your credit score and how to raise it

Credit scores are expressed in three digits — typically 300 (bad) to 850 (excellent) — for the widely used FICO score and the latest version of VantageScore, a scoring model that is a joint effort by the three major bureaus — Equifax, Experian and TransUnion.

Read more: Your credit score is about to become more forgiving

I teamed up with PostTV to break down two straightforward ways to improve your credit score.

Watch: Your credit score, explained with an apple pie

Read the companion column: The simple way to improve your credit

The simple truth is the two major ways to improve your credit is to pay your bills on time and to pay off your debt.

I know what you’re thinking. Easy for me to say. But paying your bills late is the top score-slayer. And, you might be surprised to learn that the most recent late payments impact your score more than a debt that may have been written off years ago.

Thirty-five percent of your score under FICO is your payment history. Thirty percent of your score is derived from how much you owe.

There are no shortcuts to strengthening your credit score. The sooner you realize this, the more money you’ll save, because you won’t get taken by a shady company promising to fix your credit. You can’t buy time from these companies, and that what it takes — along with financial discipline — to give a boost to a low score.

Don’t pay a credit repair company for something you can do yourself.  I understand that it’s easy to fall for the promises. Good credit is your ticket to better rates for a car or home loan. A bad credit history can leave you stuck with loans carrying high interest rates and other onerous terms.

And just so you know, credit-repair companies cannot receive payment from you until they have completed the services they have promised. The company also can’t delete accurate negative information from your credit files.

From the Federal Trade Commission read: Credit Repair Scams

Then go read: Credit Repair: How to Help Yourself

Read more: When paying off debt, gain strength by starting small

You can improve your credit score, but you have to be patient. As you pay your debts down and consistently pay your bills on time, your score will improve.

Read more: Average FICO score crosses a milestone, but let’s not get cocky

Color of Money question of the week
What confuses you most about credit scoring? Send your comments to Please include your name, city and state. In the subject line, put “Credit Score.”

Live chat today
Please join me today at noon (Eastern time) for a live discussion about your money. I’m happy to help you find an answer to a financial dilemma.

Click this link to join the discussion.

The financial struggles depicted on the canceled ‘Roseanne’ sitcom are still relevant

Last week, I asked: Did you identity with the financial struggles of in the now-canceled “Roseanne”?

Bill Johnson, of Youngstown, Ohio, wrote: “I grew up in a similar situation to the Conners. My dad was an alcoholic who lost his job and family to drinking. My mom got a college degree when I was 12 and became a teacher in 1969, making less than $5,000. I had two pair of pants and three shirts that I rotated in school (early ’70s). But I eventually escaped that situation by going to college before it became unaffordable for many. So I’ve worked in IT for 36 years and done very well. But I can still relate to the Conners. I understand what living paycheck to paycheck is like. Not being able to afford things that others took for granted. It probably made me a better man.”

“I definitely relate to a family just getting by,” wrote Aundrea, of the District. “My husband has a good job, but I’ve been unemployed for almost a year. Two years ago my husband was unemployed. It took a year for him to find a job. We are both middle-age professionals. Even when we were both employed, we were living lean. My husband worked for the state, and his salary was frozen for four years and then rolled back 2 percent because the state was broke (Washington). Now we live in the other Washington, hoping for more opportunities. We work hard and are not extravagant. We drive a 12-year-old car. I do buy organic food when I can. That is our one extravagance. We vacation at campgrounds. We live in a small apartment (we are renting out the house we own in Washington state). I know we are better off than many. However, I feel so angry when I read about voters wanting to ‘shrink’ the government because that means paying fewer people like us or paying us less.”

Linda Edmondson, of Pewaukee, Wisc., wrote: “If Trump would have spent more time watching “Roseanne” instead of ogling her ratings or relishing her twitter rants, he’d really understand his base and their economic hardships vs. passing that lame tax cut that wasn’t much benefit to most of those families anyway.”

Color of Money columns this week
Knowledge isn’t power. The right knowledge is power.

Stay informed about your money.

In addition to this newsletter, please read and share my weekly personal finance columns.

What to do if your adult children want to move home

#WhoPays: Who should foot the bill on the first date?

Newsletter comments policy
Please note it is my personal policy to identify readers who respond to questions I ask in my newsletters. I find it encourages thoughtful and civil conversation. I want my newsletters to be a safe place to express your opinion. On sensitive matters or upon request, I’m happy to include just your first name and/or last initial. But I prefer not to post anonymous comments (I do make exceptions when I’m asking questions that might reveal sensitive information or cause conflict.)

Have a question about your finances? Michelle Singletary has a weekly live chat every Thursday at noon where she discusses financial dilemmas with readers. You can also write to Michelle directly by sending an email to Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read more Color of Money columns, go here.

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