Tactics to Improve Credit Ratings (D)

Part
01
of three
Part
01

Tactics to Improve Credit Ratings (D1)

To increase credit, Americans can gradually open new accounts, avoid store credit cards, avoid joint credit products, watch out for scammers and follow the 60-day rule. More information on these tactics can be found in the attached spreadsheet.

Summary of Findings

Part
02
of three
Part
02

Tactics to Improve Credit Ratings (D2)

To increase credit, Americans can brush up on credit basics, get credit cards, pay student loans diligently, understand how much they can afford to borrow and get student credit cards. The requested information on the tactics has been presented in the attached spreadsheet.

Summary of Findings

  • In order to improve their credit scores, millennials need to first understand how credit works. According to a survey by the Consumer Federation of America and VantageScore Solutions, millennials have the lowest level of knowledge on credit as compared to older generations. They should therefore brush up on the basics of what credit is and the different ways in which they can improve it.
  • Having credit initially is essential in order to improve credit. For people who want to improve their credit but do not have a credit card yet, a logical first step is to get a credit card.
  • Student loans are reported to credit bureaus, so it is important to pay them on time every month in order to build one's credit.
  • In order to understand how much one can afford to borrow, the debt-to-income ratio should be taken into consideration. This ratio is calculated as all monthly debt obligations divided by gross monthly income. According to CFPB, consumers with higher debt-to-income ratios are more likely to find it hard to make monthly payments.
  • Student credit cards are a good way for millennials and Gen Z'ers to build their credit without having a robust credit history. These cards, however, usually have high interest rates and low credit limits.
Part
03
of three
Part
03

Tactics to Improve Credit Ratings (D3)

To increase credit, Americans can use the debt snowball technique, pay off debts using credit card consolidation, take out installment loans, pay more than once in a billing cycle and have an emergency fund. The requested information about the tactics has been presented in the attached spreadsheet and a summary has been presented below.

Summary of Findings

Sources
Sources