Broker Check

Monday Money Report

| October 16, 2023

The volatility continued in the market last week, with stocks rising early in the week only to fall on Friday. Despite all of this, the S&P 500 is still up for the year, driven largely by the seven largest companies.

Today, we’re going to talk about four ways to improve your credit score. One, make your payments on time.  Payments that are over 30 days late are reported to the credit bureaus and stay on your credit record for seven years. Put what bills you can on autopay and set reminders for things like credit card payments.

Two, have a variety of loan types. Having both installment loans, like a car loan, and revolving credit, like a credit card, improves your score.  Lenders like to see that you can manage different kinds of debt. This is why paying off your car loan, which should be a good thing, can actually cause a drop in your credit score.

Three, only use part of your available credit. Ideally, your credit utilization should be below 30%. For example, if you have a $10,000 credit limit on your Visa, you want to keep your balance at or below $3,000. Paying down credit cards is one of the fastest ways to increase your score, as your credit utilization number drops.

Four, limit new inquiries for credit. Opening multiple new accounts in a short period of time raises red flags with lenders. This is different than shopping for one loan and checking with multiple lenders in the process.  It’s pretty obvious you’re not trying to access large amounts of credit if you look at four different lenders for a car loan and end up taking out one car loan.  But opening a Visa, a Mastercard, and two store credit cards in a week will lower your credit score.

As interest rates continue to rise, and a recession still looms on the horizon, paying off unsecured loans like credit cards can do more than just improve your credit score.  Paying off debt frees up cash flow for savings and other goals.   

Your action item this week is to pull your credit report at You can receive one free credit report from each of the three credit bureaus every year. Pulling one every four months lets you check for errors or fraudulent activity.

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CovingtonAlsina is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.