Unfortunately, being black and having bad credit seem to be two things that often go hand in hand. Black comedy is filled with bad credit jokes and innuendos. However, it is possible for a black person to obtain a good credit score. In fact, an 800 credit score is acheivable over time. I would know, because I was able to do it.
My History With Credit
Like many black people, I grew up knowing very little about credit. I got my first credit card when I was 18 years old, and by the time I was 21, I had two repossessions and multiple defaults on my credit report.
Fast-forward to today. I now know what it is like to go onto a new car lot and pick whatever car I want without fear of being turned away or requiring a cosigner. I was also able to purchase my first home at the age of 26.
As of the date of this article, my general FICO Scores range from 788 – 790, and my FICO Auto scores range from 777 – 809.
How I Increased My Credit Score to 800
I will not sit here and pretend that achieving an 800 credit score happened overnight. It took me about 15 years to first see that score, and of course, my score fluctuates often depending on how I use credit.
However, achieving an excellent credit score is possible. The following paragraphs will outline the steps I took to achieve an 800 credit score.
Step 1: Create a budget
A poor credit rating is often a result of mismanagement of your finances. Getting your finances in control is the first step to improving your credit.
Before working on my credit score, I sat down and created a family budget. Making sure you pay your bills on time is essential to obtaining an 800 credit score.
Step 2: Obtain your credit report
To increase your credit score, you must first know what is affecting it. You can obtain a free and official copy of your credit report from annualcreditreport.com.
Annualcreditreport.com allows you to obtain your credit report from each of the three credit bureaus once every 12 months.
When you first begin to work on your credit, you should obtain all three of these reports. After that, the most strategic way to get periodic copies of your credit report for free is to obtain ONE of these reports every four months. The information of each of these reports is often the same, so getting one report is often good enough to monitor your credit on an ongoing basis.
Step 3: Repair your credit
Repairing your credit can be easy if you have a few negatives. However, if you have many judgments and defaults on your credit, it may be best to file for bankruptcy to get a fresh start.
If you only have a few medical bills or small judgments, you can begin your credit repair by paying these off.
Beware of debt relief and credit repair scams. A debt repair company cannot remove accurate information from your credit reports.
Step 4: Get some new credit
Once you have filed bankruptcy or paid off your debts, you must begin showing creditors that you can use your credit responsibly.
You will want to obtain at least one credit card to start your journey to an 800 credit score.
I list the cards I obtained during my rebuilding process in the article 4 credit cards for people with bad credit.
Step 5: Make timely payments
Your payment history makes up 35% of your credit score. Therefore, you must make your payments on time each month.
Following the budget you create in step 1 will help you make on-time payments.
Step 6: Maintain a good credit mix
A good mix of credit is essential to obtaining an 800 credit score. Lenders want to know that you can handle both revolving and installment accounts.
Revolving accounts refer to credit cards, retail cards, and lines of credit.
Installment accounts are those with fixed monthly payments. Examples of these are mortgage and auto loans.
Step 7: Place a Freeze on your credit file
It is a good idea to place a freeze on your credit file to prevent others from obtaining credit under your name. Fraud is not something we usually think about when our credit is poor. However, once you begin to rebuild your credit, you should protect it as much as possible.
Use the following links to obtain a credit freeze at each of the three credit bureaus.
Step 8: Remain disciplined
Once you have increased your credit score to around 700, creditors will extend more credit offers to you. You may become tempted to apply for credit simply because you have a greater likelihood of approval.
Remember these points to avoid making the same mistakes you made in the past.
- Only apply for credit you need.
- Pay your credit cards in full each month
- Do not use more than 10% of your revolving credit at any time
- Maintain a rainy day fund
- Avoid cosigning for others
If you follow the steps above, you will be on your way to an 800 credit score!
