In Layman's Terms
In Layman's Terms
Editor's Note: Although this article is written particularly for African Americans, the tips and method to increase your FICO score can really be used by anyone who currently have poor or no credit history.
Having good credit is important in our society. Your FICO score tells employers, landlords, and lenders how responsible you are with paying bills and paying back money you've borrowed. According to an Urban Institute survey 2017 only 21% of African Americans had a credit score above 700. In 2020 72% of African Americans did not have a credit card and 54% of African Americans also reported having no credit or fair/poor credit. As an African American I who had a credit score in the mid-to-low 500 range I want to share with you how I increased my FICO score to 725.
I increased my FICO score from the low 500s to 640. Then with intention and focus, I increased my score from 640 to 725 within two months, which officially placed me in the "Good Credit" range. I had a 9-5 job as a security guard with in NYC. At the time, I only had a Serve prepaid card because I couldn't open a bank account due to past mistakes. Still, I wanted to improve my credit score, so I searched Google for solutions. That's when I came across Chime, a debit card tied to Stride bank. I signed up, received my debit card, and funded it. After a short time later, I was offered the Chime Credit Builder card, also known as Chime Credit Card (a secured credit card). Chime Credit Builder helps users build credit by reporting their payment history to all three major credit bureaus. Naturally, I signed up for the Chime Credit Builder card. I used my Chime Credit Builder card to subscribe to Google's G Suite Email service ($6) and Canva ($13).
For almost a year and a half, the above two subscriptions were the only charges on my Chime Credit Builder card and occasionally groceries. I hadn't really paid attention to my FICO score until I decided to poke around in the r/personalfinance subreddit, where some users were discussing how to increase their credit scores. That's when I decided to check my FICO score and saw that I was no longer in the low 500s but now had a score of 640. After learning some tips from the subreddit and doing some research on my own, I discovered that when you have more than one credit card, your credit score gets a boost because its more data for Experian to analyze. So I applied for a no-thrills Capital One credit card (not a secured credit card). Because Capital One did a 'hard pull' credit check, my FICO credit score immediately decreased by 20 points. I realized the credit check was necessary because Capital One needs to review my score to determine my eligibility. I was approved and the credit card was shipped to my home address within seven business days. Two months later, withe some usage on the Capitol One credit card, my FICO credit score jumped to 725.
The above image is a screenshot of my FICO score taken on April 24th, 2022