Page 38 - increase your credit score

Myth 4: Credit is Bad

We mentioned the name Dave Ramsey earlier in this book. He’s a personal finance guru
who promotes paying off debt, building a financial plan and avoiding credit cards – or any

other debt – at all costs.

A successful businessman, Ramsey definitely has the acumen to build wealth and forgo
loans so he can pay for cars and homes in cash.

While this is a great piece of advice – debt can kill credit scores – it’s also an unattainable

maxim for most consumers.

Yes, the goal of your financial plan should be to get out of debt. But, most of us don’t have
the reserves to buy a home or a car with cash.

In the meantime, what do you do? Build great credit scores so that, when you have to

borrow, you can get the best rates and save yourself thousands or tens of thousands over
the life of your loan.

Myth 5: The Credit Scoring System is Foolproof

This is a tricky subject because, in a certain sense, it doesn’t matter if the system is broken

or not – three bureaus control your information and there are two specific, popular
scoring models.

However, there is room for criticism.

I’ll give you an example from my own life. Last year I had some credit card balances above

30% of my limit. So, I made a couple of balance transfers to other cards. Because of that,
all my balances were under 30% and my scores shot up by double digits.

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