In my early twenties, I was blissfully unaware of the significance of credit. Although, it’s a bit embarrassing to admit, I just didn’t understand it. Like many Americans, I believed that as long as I paid my bills on time and didn’t exceed my credit limit, I’d be fine. Growing up, I saw bill collectors as the enemy, and avoiding them seemed like the best strategy. But this mindset can devastate your credit score. Once I started learning about credit and financial literacy, I discovered that achieving a high credit score is quite straightforward—provided you avoid falling too deep into debt. Here are five practical tips to help you join the 700 Club within six months or less.

1. Get a Credit or Secured Card

Not having a credit card can actually harm your credit-building efforts. To establish a solid credit score, you need to demonstrate that you can manage credit or debt. If you can’t get a regular credit card, consider a secured card. With a secured card, you use your own money as collateral, essentially borrowing from yourself. The aim is to build a strong payment history and show lenders that you can handle debt responsibly. Avoid using your secured card like a regular credit card; instead, treat it as a tool for building credit. Use it for small, manageable expenses like gas, phone bills, or groceries, and pay it off immediately. Always pay on time!

2. Remove Derogatory Items

Your payment history accounts for 35% of your credit score. One late payment can significantly drop your score. If you have negative items on your credit report, it’s crucial to get them removed as soon as possible. The Fair Credit Reporting Act allows consumers to dispute any information on their credit file. Since 1 in 5 people have inaccuracies on their reports, taking action is important. If you’re unsure how to proceed or don’t have the time, many companies can help. I partner with a company that can remove negative items in 45 to 90 days—contact me for assistance.

3. Pay Down Debt

Reducing your credit card debt is vital. Keeping your credit utilization below 30% is crucial for maintaining a good credit score. Here are some effective strategies:

• Focus on paying off one card at a time while making minimum payments on others.
• Target the card with the highest interest rate and balance first.
• Consider a personal loan to pay off credit card debt, as personal loans often have lower interest rates.
• If possible, open a new card and transfer your debt to take advantage of lower introductory rates. Remember, staying under 30% of your credit limit will help you avoid trouble.

4. Set Up Automatic Payments

Create a budget to track your monthly expenses, then set up automatic payments for all bills you can afford to pay automatically. This ensures you stay current with your payments. Even one late payment can drastically lower your credit score, so consistency is key.

5. Become an Authorized User

Piggyback on someone else’s good credit by becoming an authorized user on their credit card. This allows you to benefit from their positive payment history and low credit utilization, which can significantly boost your score. However, there are risks involved. If the primary cardholder misses a payment or carries a high balance, it could negatively impact your credit score. I usually recommend becoming an authorized user under a parent, sibling, or spouse. Avoid doing this with friends or in temporary romantic relationships to minimize risk. For help with credit restoration, feel free to reach out to me.

Additional Tips for Success:

• Regularly monitor your credit report for inaccuracies.
• Keep old credit accounts open to maintain a longer credit history.
• Avoid applying for too many new credit accounts in a short period.
• Consider setting credit utilization alerts to help manage spending.
• Diversify your credit mix with a combination of credit cards, installment loans, and retail accounts.

By following these steps, you’ll be well on your way to joining the 700 Club and securing a stronger financial future. As a realtor and mortgage loan officer, I offer free consultations to discuss your credit if you’re looking to buy a home, invest, or rent, so don’t hesitate to contact me.