Lorenzo Frias has specific financial goals in life, including buying a better car and someday buying his own home.

But all of that came to a screeching halt when he found out his credit wasn’t good. In fact, his credit was so poor that he couldn’t even get a credit card — let alone a car loan or a mortgage, which are harder to get than a credit card. It turned out his goals were way out of reach.

What was his credit score? “It was 523, to be exact,” he says. “To be honest, it was pretty bad.”

Late payments to an American Express card had pretty much ruined his credit. Your credit score is like your financial fingerprint, and a score below 600 makes you ineligible for most loans or credit cards.

Frias puts it bluntly.

“It’s embarrassing,” he says. “I realized there were definitely some things I needed to address.”

That’s when he found Credit Sesame, a free website that helps people manage their credit better.

His goal was to raise his credit score to 700 by the time he turned 24, and he’s nearly there. More than a year after joining Credit Sesame, he’s about to turn 24, and his credit score is 691 — a huge improvement.*

How was he able to boost his score by nearly 170 points?1 By following the website’s tips and using its free tools. Now he’s about to lease a better apartment, and he’s hatching plans to buy that car and house he’s dreaming of.

How Your Credit Affects Your Life — and How You Can Raise Your Score

Your credit score isn’t just some pointless three-digit number. It influences major parts of your life, like where you live and what you drive. The higher your score, the better deal you’ll get on big things like a mortgage, a car loan, a credit card, a car rental or an apartment lease.

Like Frias, 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.2

With his shiny new credit score, Frias just signed a lease on an apartment in the San Francisco Bay Area. He’s moving there from Los Angeles with his girlfriend and their two dogs, so he can live closer to work. Like many of us, he’s been working remotely, but that likely won’t last forever.

Getting approved for the lease was no problem. “I had flying colors across the board,” Frias said. “I was really happy to see that.”

He’s been driving what he calls “a little bucket” — an old Honda Civic that he’s nursing along, even though it needs a new ignition and is likely on its last legs. Now he’s in a position to change that.

He’s been able to build up his savings and says he’s waiting to see what happens to car prices, which are fluctuating madly.

As for buying a house, the Federal Housing Administration has pre-approved him for a $760,000 mortgage. “So there’s that to look forward to — I can buy a home.”

What’s the Secret?

So how did Frias raise his credit score by 168 points?1 What’s the secret?

When you sign up with Credit Sesame, it immediately shows you what your credit score is. It shows you why you have the score you do, and it gives you personalized tips to steer you in the right direction.

If your credit is bad, it’ll show you steps you can take to help fix it. If it’s good, it’ll show you ways you could make it even better. And if it’s excellent, well, it’ll show you how to keep it that way.

It’ll even show you if there’s a mistake on your credit report that’s holding you back. (One in five reports has a mistake.)

Following Credit Sesame’s advice, Frias took the following steps:

1. Credit-Builder Loan

He took out a $1,500 credit-builder loan that was recommended to him. It’s a loan that’s specifically designed to help you build your credit. You borrow money, but the bank holds onto that money until you’ve paid off the loan.

Each month, you make small payments toward the loan. Those payments get reported to the three credit bureaus. They see that you’re making payments, and your credit starts to reflect that.

Once you’ve paid off your loan, you get all your payments back, minus a little interest. So you’ve started a little savings stash.

2. Secured Credit Card

Frias got a secured credit card that was recommended to him. This is useful for people who can’t qualify for traditional credit cards. It’s similar to a debit card. Once you put down a deposit, you can use that amount in credit. But unlike a debit card, the secured credit card lender reports your payments to credit bureaus so you can establish a credit history.

3. Other Credit Cards

Once his credit started improving, Frias applied for traditional credit cards. It actually can help your credit score to have credit that you’re not fully using.

The percentage of your overall credit limit that you’re using is one of the factors that your credit score is based on, along with your payment history, length of credit history and diversity of credit.

Frias and his partner share a number of different credit cards that they use for different purposes.

“I’m always paying off my credit card bills every month,” he said. “I don’t leave an unpaid balance.”

4. Disputing Negative Items

Once you review your credit report, you can dispute certain negative marks that are dragging you down. You send dispute letters to the three major credit bureaus: Equifax, Experian and Transunion.

Frias had a company named Lexington Law doing this for him, but he quickly decided that was too expensive and started doing it himself.

“Until then, I didn’t know I could message the credit bureaus myself,” he said. “Once you realize the power’s in your hands, you can go ahead and do the same things they’re doing.”

‘We’re Doing So Much Better’

Now that Frias has a better credit score, he and his girlfriend are packing to move to the Bay Area.

“We’ve got a U-Haul ordered for the end of the month,” he said. “I recommended Credit Sesame to my girlfriend, and it benefited her as well. Financially, we’re doing so much better.”

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He’s a Credit Sesame member and finally got his credit score above 700, woo hoo!1

1 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.

2Credit Sesame does not guarantee any of these results, and some may even see a decrease in their credit score. Any score improvement is the result of many factors, including paying bills on time, keeping credit balances low, avoiding unnecessary inquiries, appropriate financial planning and developing better credit habits.


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