6 Cheats to Boost Your Credit Score

Your credit score impacts nearly every avenue of your life, from buying a car to getting a job.

To that end, the Rainbow PUSH Coalition and the Citizenship Education Fund partnered with Chevrolet to launch the Financial Empowerment Series, a free event to teach money management best practices. The Financial Empowerment Series took place at Rainbow PUSH headquarters in Chicago over the weekend.

One of the speakers, William Cheeks, President, ABBA Associates Inc., says that he has a perfect credit score of 850 (850 is perfect credit; 500 and below is considered poor credit) because he worked at a credit monitoring agency for decades and he knows the system.

Mr. Cheeks offered these 6 Cheats to Boost Your Credit Score

1. Get a free copy of your credit report from http://ift.tt/o2j1vQ or call 877-322-8228. Report any discrepancies immediately.

2. Establish credit and use it, sparingly. If you have a credit card that you've paid off in full and don't use, it's not helping your score at all. "Spend about $20 on your credit card and pay it off in full at the end of the month," Cheeks advises, if you want to boost your credit score.

3. Avoid store-issued credit cards. Don't apply for that store credit card to get the extra 20 percent off of your purchase, instead stick to general purpose credit cards (Visa, MasterCard, Discover and American Express). "Don't your favorite stores accept MasterCard, Visa, Discover and American Express?" Cheeks asks. "Then why do you have the store cards?"

4. Pay bills on time, all the time. If you have a great credit score (775 and above) missing one payment can shave 90-110 points off your credit score. Also, entering into a debt-settlement plan can shave 45-65 points off your credit score.

5. Only spend 6-8% of the limit on your credit card. A low balance shows the credit reporting agency that you don't carry a lot of debt, and that will increase your credit score. Cheeks suggests that you charge a little, and then pay that off at the end of each billing cycle. "Do not be a revolver," Cheeks says. "When you make purchases on the credit card, pay the balance in full on a monthly basis."

6. Avoid applying for multiple credit cards. "A hard inquiry occurs when you apply for a line of credit, and that lowers your credit score, unless it is a mortgage or car purchase," Cheeks says. "When you're buying a house or car, the credit reporting agencies allow you 15-20 days to shop around, and they will lump those hard inquiries." Conversely, a soft inquiry occurs when a company looks at your credit report to pre-qualify you for an offer, and it does not lower your credit score.

Mr. Cheeks adds that no matter your current financial situation, with due diligence, you can reestablish your credit worthiness and end the frustrating cycle of paying more and getting less.

Photo: William Cheeks by Zondra Hughes

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