Millennials: Freak back in to raise score

Credit scores give and credit scores take away — but unlike the Lord, the mystery surrounding credit scores is overstated.

So, don’t freak out, millennials.

Just as more of you start stepping up to homeownership come signs that some of you are losing it.

Dallas-based ValueInsured’s quarterly Modern Homebuyer Survey revealed a lot of millennial angst, summed up in this stat:

“In the third quarter of 2018, 48 percent of all millennials believe buying a home in America today is a good investment; this is a record low, down from 54 percent in the second quarter. The previous high was 77 percent two years ago.”

Well, if you want to own a home — and I know that many of you simply do not — freak back in, and get to work on improving your credit score.

It won’t necessarily be pleasant, but I know from personal experience that it will be satisfying.

Here are some things to do, from Douglas Boneparth, a certified financial planner who specializes in millennials and wrote “The Millennial Money Fix,” by way of Experian, one of the credit bureaus. They’ll help anyone improve a credit score, not just millennials.

• Get organized.

“Start by pulling your credit reports and credit scores to understand where you stand. Review your reports to refresh your memory on what credit cards and debts you have outstanding.

“Get your free credit report from Experian, where you can also get your FICO® Score. You are also entitled to one free credit report every 12 months from Experian, Equifax, and TransUnion at AnnualCredit Report.com.

“Then, make a list of all your loans, who services them, and how much you pay each month. The same goes for any car loans. Similarly, make a list of all your assets, including bank accounts, 401(k)s and IRAs, and any other savings you might have. Banks will want to know all this information.”

• Write down your goals and prioritize them.

“Start by identifying what your goals are, and then quantify those goals by time and value: When do you want to achieve them and how much is that going to cost?

“Then, prioritize according to what’s most important to you. Once you do that, you can figure out how much to save and when you will reach your goal.”

• Go over your budget and figure out where you can save.

“To get there, you need to create a budget and track your spending, including groceries, utilities, childcare, and entertainment. Check it every three months to see how you’re doing and identify the opportunities for savings. You might have to cut expenses, take on extra work or find a new job, but you can’t do that until you know how much money is coming in and going out.

“Once you have a budget and know how much you can save each month, apply those amounts to the goal system you created.”

• Start eliminating debt and making payments on time.

“Once you’ve identified how much you can save each month, you should also figure out how much of your money you can apply to pay down your debts. Cutting down credit card debt should be a primary goal because that will boost your credit scores significantly.

“You should also make it a habit to never miss paying a bill on time because even one late or missed payment can drag your scores down.”

• Don’t use more than 30 percent of your available credit.

“Your credit utilization ratio is the amount money you spend on credit cards each month compared with the amount of total credit available to you. You’ll want to keep your credit utilization ratio under 30 percent, and for the best scores, under 10 percent.”

• Review your credit reports regularly.

“Make a point to check your credit reports at least once a year to review them for errors because your scores are calculated based on the information in those reports. You’ll find your reports at each of the three credit bureaus: Equifax, TransUnion, and Experian. If there are any errors, you should initiate a dispute with the credit bureau.

“(Get your free credit report from Experian, where you can also get your FICO Score. You are also entitled to one free credit report every 12 months from Experian, Equifax, and TransUnion at AnnualCreditReport. com.)”

• Don’t open new lines of credit.

“When you’re getting ready to apply for a mortgage, avoid opening new credit accounts, because that will likely bring your scores down.”

Finally, don’t have a cow, man. It can be done.