How to Improve My Credit Score

Having a good credit score is essential in order to obtain financing at affordable rates and can save you thousands of dollars in terms of interest charges. Here are 7 easy steps to improve your credit score. Why listen to me? I have a 790 FICO score so I know what I am talking about. Enjoy.

1) Get added as an authorized user to your parent's cards (make sure they ask for your SSN). These will report on your credit score and increase your amount of available credit outstanding, thus lowering your overall credit utilization (30% of score). This only makes sense if your parents have never been late on the card and keep utilization low (under 10%). 

2) Check your credit report with the 3 credit bureaus for free at annualcreditreport.com-- you are allowed to access your report once every 12 months. You will not see your FICO score, but it is always valuable to check for mistakes or errors on your report.

3) The amount of credit you get approved for initially is mainly a function of FICO score + stated income. Notice stated income. The credit card companies do not verify your income. Sometimes they will ask to access your tax returns (very rare) and you do not have to provide it to them (app will be declined). Every time you request new credit--they will Hard pull you (negatively effects your score). Sometimes they ask for Household Income--when I was in college I just included my parent's income. Never had a problem. The goal is to get the highest available amount of outstanding credit allowed. This will reduce your overall utilization rate, thus improving your score dramatically.

4) Chase is notorious for Hard Pulls every time you ask for a credit line increase which is why I don't like them. American express however will SP credit line increases. Blue cash everyday 3% on supermarkets, 2% gas, 1% on everything else. Furthermore, AMEX has a special 61 day 3X credit limit hack available. Once you open your new account (HP)--you are eligible for a 3X increase to your credit limit after 61 days--best of all Soft Pull (does not impact credit score) guaranteed. This makes it much easier to increase the amount of credit available--which helps increase your score. Just don't go over 25K or you risk a Financial Review (they temporarily suspend you card and make your prove income, assets, etc).

Another benefit of AMEX is backdating your card. I got my first AMEX 8 yrs ago. Got another one last year. They back date your new card so that it looks like it too has been open 8 yrs. This increases my average age of credit (about 15% of FICO score).

5) Don't forget Discover. They have a new product with their Discover IT card which allows you free access to your real FICO score once a month. They have rotating 5% cash back categories which change quarterly, along with 1% back on everything. Also they will SP credit line increase requests after 3 months. I have this card purely for the free FICO. Some companies scam you buy charging you for your FICO score--this way I get it for free. This card definitely pays for itself.

6) Hit up the MyFico forums--they are the best when it comes to all things credit cards and improving your FICO score.

7) Never pay an annual fee for a credit card.  Most people think they can beat the annual fee by some combination of tricks, and heavy spending. Most fail. Credit card companies are set up to make money. They have complex algorithms that determine who much on average they can make from people. To make this short: don't pay annual fees for cards. They are not worth it in the end.

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How to Improve My Credit Score

Fed Chair Janet Yellen on monetary policy: "the best way to build credibility was to lie"

Not new to BSI readers, but Janet Yellen the new head of the Fed admits that the best way to build credibility is to lie to the idiot public. At least she is honest about it, unlike Banana Ben Bernanke. 

From a previous black swan post:

In fact, San Francisco Fed President Janet Yellen mentioned in a speech that central bankers openly lie as a matter of policy. She recounts her discussions with two international central bankers at her first Jackson Hole meeting:

Two of the leading central bankers in the world took me aside to help educate me about how to conduct myself so I would be an upstanding central bank citizen. They offered me the very same advice: Good central bankers never admit they pursue stabilization policy. Such an admission would reduce the confidence of the public in  your commitment to price stability and therefore undermine your credibility and effectiveness as a monetary policymaker. I responded that I appreciated the advice, especially from such distinguished central bankers, but that it left me a bit confused. They seemed to be telling me that the best way to build credibility was to lie, specifically about how I understood the objectives and how I intended to conduct monetary policy.

Am I the only one who wishes we had a more attractive Fed Chairwoman? I mean if we are going to select a woman for the most powerful position in the country, Obama could have done much better. Admit it--you would feel much better being lied to by an attractive woman like this below, compared to grandma Yellen.

On a personal note--women in business suits (with stockings) are incredibly sexy. You mind explodes with all of the possibilities--like ripping of her stockings, what she would look like in various positions on my desk, etc. But I digress.

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Fed Chair Janet Yellen on monetary policy: "the best way to build credibility was to lie"