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Finance FriYAY: Credit Hacks

Nothing excites me more than a good hack hunny! Especially as the hack pertains to credit and finance! If you are anything like me, you are invested in all that Tik Tok, YouTube and Twitter Universities aspire to teach us. I am an avid proponent of learning, I consider myself a student at life. As such, I whole heartedly believe that our greatest investment is always in and of self. Secondly, observation is the key component to longevity and success. That said, paying attention to what’s happening in the world is key. Many economists agree that although we have been immersed in an economic downturn in the last several years (mainly due to the pandemic), it is the most opportune time to take advantage of establishing and leveraging credit. How does one do that? Great! I am so glad that you ask! I have stumbled across the following credit hacks that have assisted me in making tremendous strides in improving and preserving my credit.

First things first, while the information I am sharing pertains to Navy Federal it can be replicated with any Credit Union or Financial Institution that offers secure (collateralized) lending products. Further, it is important to note that membership with Navy Federal requires sponsorship. This means that an existing member must provide you with specific information in order to join. YASSSSS! Membership is extremely exclusive- invite only Chile! My type of exclusivity. I promise you that if you follow these steps precisely, you will notice an improvement in your credit score within 30 days!

Now that we have all of that out of the way, let’s jump into it!

  • The first thing that you will need to do is establish a relationship with Navy Federal. If you don’t find a sponsor! 

    • To establish a relationship a membership must be created $5 into a savings account.

  • Once your membership has been cultivated you will need to open a checking account. There are several options, the most cost effective option is the free checking account with no miminum balance requirements. 

  • You then want to deposit the amount that you would like your secured loan to be in the savings account. E.g. if you want the loan to be for $1,000 you will need to deposit $1,000. 

    • I recommend going for as much as you can afford to not have access to for the next 11 months or so. 

    • By establishing a higher credit limit, the amount of the trade line will be reported to the credit bureaus. In turn, this will make you more attractive to lenders in the future.

  • Once the money is available in the savings account, open a CD. Again there are several options. ( I will post a picture of the Easy CD below).

  • Select a 12 month CD, then apply for a secured loan. A member representative will call you to confirm the details, discuss the rate and set up payment options. 

  • Once the secured loan is approved, ensure that the funds are directly deposited into the savings account.

  • Set up an automatic payment deduction from the savings account to begin paying the loan back. You may need to deposit approximately $100 extra in the savings account to cover the finance charge. (Again the interest rate and finance charges will vary based upon credit as well as how much the loan is for). 

  • Rinse and repeat the process of depositing cash into the savings account. This time apply for a secured CD.

    • The minimum for the secured CD is $200. There aren’t any annual fees, but the interest rate is a tad bit high. 

    • Our goal is to pay off the balance in its entirety every month, so we aren’t concerned about the interest rate. 

    • Remember, interest is only owed on a balance that is carried over from statement cycle to statement cycle. Paying the balance down to zero eliminates accrued interest.

  • Set up an automatic bill pay to a utility bill from your secured credit card.

    • This way you have monthly activity on the card and its going toward an item that you actually need. 

    • Set up an automatic payment through your new Navy Fed checking account to pay the credit card balance in full every month.

    • Split the payments in half. Make one payment at least three days prior to your statement cycle date, and the other payment at least three days prior to your actual due date. (This will trick the system into reporting two payments for you in one month as well as a reduced balance between your statement date and due date which helps the utitlization portion of your credit score).

  • The final step is to then create an Experian profile. Apply for Experian Boost by attaching the same utility bill that is being paid from your secured credit card to the Experian Boost profile. 

    • This will allow you to have the same utility bill used twice essentially to boost your credit. 

Listen, building, rebuilding, establishing and preserving credit is no easy feat. As with most things in life, it will only work if you do the work. It is also important to note that there is no easy fix to credit. Credit repair can be lengthy and requires personal dedication. I cannot stress enough how important it is to invest in protecting your credit! Keep in mind that your score will fluctuate, much like weight it is not a number that we should be married to. With that said, again, much like weight, credit is something that requires constant attention and monitoring! Please let me know if you find these tips to be helpful or if you are in need of more information! What are you interested in learning more about? Hit me up! I want to know!



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