5 Easy Ways Shanté Nicole Increased Her FICO Score by 200 Points – Referred by Budgetnista Article

Summary: From homeless and jobless to raising my FICO credit by 200 points and founding Financial Common Cents (and a 78,000 member Facebook Community), here's how I did it!

As a financial educator and credit coach, I have helped thousands of individuals around the world become better stewards of their money by providing tips, resources, and instruction on the topics of debt management, building and repairing their credit, savings, spending habits, and budgeting.

So, what put that spark in me to want to help others on this path to excellent creditworthiness and financial freedom?

Bills and Credit and Debt, OH MY! Bills and Credit and Debt, OH MY!

Does this chant ring a bell?

Perhaps you remember the scene from “The Wizard of Oz” when the characters were skipping through the woods, trying to make it to Emerald City.

As they journeyed, they were warned that they might encounter lions, tigers, and bears along the way. 

Emerald City was a magical place where wishes were granted and dreams came to life. Here, they could find the very things they'd been searching for; the things they longed for.

My First Experience with Credit Cards

I moved out on my own at the age of 19. 

Working a job that merely paid $8.25, I had to rely heavily on credit cards to help me get by. 

Needless to say, debt caught up with and overtook me QUICKLY! I tried my best to stay on top of my credit card bills, but I began thinking to myself, at this rate, I should be out of debt in …NEVER! 

I had always been very knowledgeable about budgeting and credit repair, and during this stage in my life I did everything in my power to apply what I knew, but sometimes life throws you curve balls.

…and they are extremely hard to hit or catch if you aren’t prepared.

Medical Bills, Deductibles, and Collections, OH MY!

Sure, I had medical insurance, however, deductibles and co-payments piled up, and they piled up fast!

Bills went without payments, and a good number of my accounts were sent to collection agencies.

My scores took a hit and plunged deep, but at this point in my life, I couldn’t have cared less about my credit score. I was fighting for my life and that was my only focus.

Once I was in remission, the winds finally subsided and my financial twister began to settle down.

A few years passed and credit card debt and bills were paid in full. I began utilizing my credit cards appropriately, collection items were paid and removed from my credit reports, and my scores increased. I was just starting to regain control of my credit and finances…and then…another twister!

In 2010, I went through a divorce.

I was left with thousands of dollars of debt and a drained 401k. Oh, and did I also mention that I lost my job?

Just when it seemed I was in control of my finances, I found myself caught up in another devastating storm. I could not find full-time employment to save my life.

I submitted applications. I went on interviews with no callbacks. This resulted in losing my apartment and becoming homeless.

HOMELESS, with a 4 year old autistic child! There was a light at the end of the tunnel, and it seemed to be a train, coming at me, in full force.

My credit score at the time was at an all-time low of 546.

Recovering from a 546 Credit Score Started with Education

I decided to go back to school (well, hello student loans!). Instead of a full-time job, I found two part-time jobs. The struggle was real…but I survived!

I graduated in 2013 and was ready to conquer the world. Let’s lock down this job! Let’s pay off this debt! Let’s restore this credit! Let’s get a substantial savings plan in place!

Well, a year and a half later…no full-time job, no savings, MORE debt, and poor credit. 

How I Increased My FICO Score By 200 Points

At my lowest point, my credit score was 546.  I had been through:

I’d like to share with you a few of the tips that helped me on my journey:

Credit is really all about showing how responsible you are with borrowing money and paying it back, and not just paying it back, but paying on time.

It’s fine and dandy if you can show that you have the ability to pay what you borrowed, but the creditors not only want their money, but when they’ve asked for it.  

Constant late payments, which can end up in charge off and/or collection status, can give the impression that you are an irresponsible consumer.  Lenders will deem you risky and it will have a negative effect on your scores, as “Payment history” is the highest component of how scores are calculated.

Once I starting paying on time, every time, my score shot up.

Ok, so now you understand payment history is the #1 thing that affects your score.  And normally, it takes time to build up a solid history of on-time payments, right?

BUT...

One way to "trick" the system is to get a family member to add you as an "authorized user" to their credit card.  The benefit is your credit file will inherit that card's payment history.  So if the account is 10 years old, your credit file immediately looks like you've been paying on that tradeline for 10 years!  Note, you only want to do this if they have a good payment history.

Simply ask your relative or friend to call their credit card company and add you as an authorized user.

All it takes is a 2 minute phone call.

Your relative needs to call their credit card company and request they add you as an authorized user to the account.  They will need your:

• Name
• Date of birth
• Social security number

It's usually free and it won't hurt your family member's credit as long as you don't charge anything on your card.  Your family member can even request the card be sent to their home rather than to you!

Having a good credit is about a lot more than not having negative items on your credit reports.

It is quite possible to have no negative items reporting, and still have low credit scores. 

How is this possible?

Well, “Utilization” is the second highest component of a FICO score. Credit utilization is simply a measure of how much of your available credit you're using.

If you’re showing too much or not showing any, this can have a negative impact.  

Get in the habit of using credit cards consistently, keeping utilization low (between 10-30%), and paying in full when the bills are due.  

Also, using credit cards for money you already have ensures that you’re able to pay in full, which helps you avoid paying interest, because let’s face it…who wants to end up paying more than the original purchase price for an item?

Start with a secured credit card and don't apply for multiple cards in a short period of time.

I know, I know…in order to have good credit, you need to have obtain credit, and in order to obtain credit, you have to apply.  

HOWEVER, it is never wise to apply for multiple lines of credit, back to back.  When I was in the process of rebuilding, I recognized that it was unlikely that I’d receive an unsecured credit card, so I started with a nice $300 secured card with Bank of America, which eventually became unsecured after 12 months.

As you ease on down the road to repairing your credit and getting out of debt (yes, I’m still sticking to “Wizard of Oz” references), you may grow tired, frustrated, and impatient. 

You may reach your field of poppies (poppies were flowers in the movie, known for causing you to enter a slumber-like state).  You will feel like you’ve been working at it for months, maybe even years, without seeing much progress. 

When you reach this point, don’t slumber.  Don’t stop. Don’t rest.  Don’t get discouraged.  Don’t head back to the starting point, just because the goal to the finish line seems so far away.  

When you get to a field of poppies...RUN! Run as fast as you can! Find that motivation to continue on. Keep Emerald City in your view.

Staying on the path has gotten me where I am today.  I can proudly announce that I’ve increased my FICO and Vantage Score over 200 points and have zero credit card debt.  Not only that, but I have a substantial amount of savings. Will I stop here? No, I will not!

*Study participants who received 100+ point gains stayed with credit repair company for 6 months or more, on average.