5 Ways to “Play” Up Your Credit

Financial Goals

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Dealing with your credit score can sometimes feel like an Aggravation, but if you’re taking a Risk with those three digits, you could find yourself hearing Sorry!

Your credit score isn’t a game, but why not use some popular playing boards to illustrate valuable financial lessons and the money moves you can safely make in the game of Life. Follow these five tips and your credit score will be sweeter than Candy Land.

Beware of Over-consumption

In Hungry Hungry Hippos, each player tries to get his or her chomping beast to consume the most marbles. But a large appetite is a big fat no-no when it comes to spending.

“The luxury-loving spender doesn’t know the meaning of ‘delayed gratification’ and charges her cards to the max,” says Ellie Kay, author of Living Rich for Less. “Just because you haven’t reached your credit limit doesn’t mean you should spend until you do. The overspender probably has a bad credit score because of his or her debt-to-available-credit ratio, Kay says. Consumers should aim to carry balances that are no higher than 30% of their credit limits — and the lower, the better.

There are game players who are fully aware of their overspending but continue to pay only their minimum balances. Gobbling up every goodie to “win” status can lead to a bad case of heartburn. Ultimately, moves like this will only hurt you when you try to buy a car or house, Kay says. To eliminate indigestion, develop a plan to rid yourself of consumer debt.

Focus on the Details

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Trivial Pursuit is all about completing your six-piece pie. Pamela Yellen, financial security expert and author of “Bank On Yourself,” explains how to play up your own “credit pie” and win the money game.

If you’re the kind of person who argues the validity of a Trivial Pursuit answer no matter what the question-and-answer card says, you should know that you have to be your own advocate when it comes to your credit report, too. Make sure your credit issuers are reporting account details such as your credit limits — and reporting them correctly.

Yellen suggests periodically reviewing your credit report and comparing the credit limits being reported against the limits on your card statements. Correcting such errors “is one of the simplest and most effective ways to improve your score,” Yellen says.

Do Your Homework

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In the detective game Clue, the evidence needed to solve whodunit is right in front of you. But a player can lose footing if he starts trusting the wrong people. When it comes to finances, you know which cards are in your hands, but you shouldn’t guess what cards your lenders hold.

“Amazingly, most people spend more time deciding where to eat lunch than they spend selecting their mortgage lender,” says Todd Huettner, president of real-estate lender Huettner Capital. “A qualified lender will save you more time and money than you can imagine.”

If your credit isn’t in great shape, consider working with a mortgage broker who could help you improve it. Great credit used to get you a loan all by itself, but “with full-doc loans and tighter requirements, a credit score is just the beginning,” says Huettner.

Ask the smart questions before Colonel Mustard wields a lead pipe! Huettner suggests collecting these clues: “Does your lender [or broker] have the experience to get your loan closed or was he selling cell phones a few months ago? Does he know the underwriting guidelines that will affect your loan? Will he monitor interest rates, plan for the unexpected, and be accessible?”

Make knowledge your weapon of choice. “Plenty of people with great credit are not getting loans due to inept lenders,” Huettner says.

Eliminate Debt

The game Taboo is about avoiding saying certain words. But what you don’t do can actually kill your credit score. “Financial taboos come in many shapes and sizes,” says Howard Dvorkin, founder of ConsolidatedCredit.org and author of “Credit Hell: How to Dig out of Debt.” One of the biggest taboos is failing to keep track of spending and stick to a budget.

Americans are carrying $874 billion in revolving debt, according to the Federal Reserve. With dismal unemployment stats and creditors adding fees, consumers are struggling to make card payments. And impulse shopping happens, making it easy to lose track of how much they’ve spent until the bill arrives.

Try to distance yourself from credit-card dependence. “Unless you pay the balances in full, adding on interest can mean you’re paying more than items are worth,” says Dvorkin. “People need to dedicate themselves to paying down debt and not using credit cards unless they can pay them off in a timely manner.”

Understand the Ebb and Flow

photo: Peter E. Lee

Chutes and Ladders mirrors credit score behavior – one move can have you riding high or tumbling down the ladder. “Your path to a higher credit score is a similar game of rewards and consequences,” says Joy Clady, a fee-only financial planner with Financial Service Group. “Some credit habits will give you a boost, while others are large advances. Some missteps lower your score slightly, while others can make you lose the progress that may have taken months or years to achieve.”

This is where the game’s rules come into play. “What’s lost in one turn cannot be recovered in your next turn,” Clady says. Only patience, perseverance, and many more rolls of the dice will get you back to your previous level. One bill going to collections can slide your score down the ladder. But paying it off the next month won’t automatically make the climb easier. “Overcoming that stumbling block often requires month after month of positive information,” she says.

When it comes to credit scores, slow and steady wins the race. “Unlike Chutes and Ladders, improving your credit score is not simply a game of chance. We each have the ability to choose our moves to make sure we avoid the chutes and move ahead,” says Clady. “Consistently paying your bills on time, keeping balances low, and an overall responsible use of credit is like steadily moving up in the game, getting you closer to the winning space of excellent credit.”

5 Ways You Can “Play” Up Your Credit is provided by Experian.com.

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