- Nik Ojekunle has a history of making erroneous purchases with her credit card, which has lowered her credit score.
- She started making tiny purchases on her credit card and paying it off in full every two weeks.
- As a result, she maintained a debt-to-limit ratio of less than 30% they don’t check your credit.
In her early twenties, fashion and beauty blogger Nik Ojekunle, of Los Angeles’ Specs and Blazer, didn’t understand how recklessly she’d been using her credit card. She was known for making late payments or merely paying the minimum amount owed. She also tended to use her credit card to max it out.
“Immigrants and people of African descent in general aren’t educated much about the importance of credit. We’re trained to avoid it or completely destroy it, as if there were no other option. Because of this, I’d want to utilize my position to spread the message that using credit is perfectly acceptable “According to Ojekunle,
Only when she decided to buy a house did she understand how vital it is to have a strong credit history when applying for a mortgage or other long-term loan. That realization prompted her to take action to improve her credit rating.
Her credit score has continued to rise due to the basic tactics she has learned and uses. What does she do?
She treats her credit card as a debit card and makes purchases with it.
Ojekunle used to avoid using her credit card for routine purchases in the past, but now she does. There were only a handful of times in her life when it would be necessary for her to use it, and she kept it in her wallet for such times. As a result, when she couldn’t afford her rent, she would use her credit card to pay it. When she couldn’t afford a vehicle payment or a medical cost, she turned to her credit card for help. Every time she used her card to pay for anything, she was getting closer and closer to hitting her credit limit.
Her Chase Sapphire Preferred Card proved to be a terrific tool for rebuilding her credit when she used it instead of her debit card to make little expenditures like groceries and petrol every day. This allows her to make more frequent payments since the fees are low.
Since credit cards need proof of usage and repayment, Ojekunle explains, “I refused to use my credit card because I was always terrified of it.”
She doesn’t use more than 30% of her monthly credit limit.
For herself, she established a limit of 30 percent of the amount she had on her credit card. She checks her balance daily by logging into her Chase account. She can use her debit card if she gets close to that limit.
“I learned that the closer you go to your due date, the lower your credit usage should be. To illustrate, if your credit card limit is $1,000, you should only carry a $300 debt at any one time. “A source informed Insider that Ojekunle was the source of information.
Five key elements contribute to a person’s FICO score, one of them is their amount of debt. As a result, lenders may assume that you’re a higher-risk borrower if your credit card amount is significant. According to Experian’s experts, it’s best to maintain your credit card amount at or below 30%.
Every two weeks, she pays the whole amount of her credit card bill in full.
Ojekunle has developed a practice of paying her credit card bill every few weeks rather than every month. This prevents her from amassing a large balance at the end of her statement. Her credit usage percentage remains substantially below 30% due to this procedure.
The sooner you pay off your debt, the less likely you will spend your money on other things.
The daily balance is also used to calculate interest costs, which are accrued daily. If you cannot pay your entire account in total, making early payments may dramatically minimize interest rates even before the due date.
She uses a software program to make automatic payments using her credit card.
Ojekunle used to write down the dates of her payments on a calendar until she discovered she could automate her bank’s monthly payments. Currently, she has the system set up such that she pays the whole amount due on the 9th and 23rd of each month.
An excellent method to ease the pain of paying off debt each month is to set up an automatic payment system. Additionally, you’re less likely to miss a payment deadline if you make sure to have a sufficient amount of money in your bank account to cover the outstanding sum.
Payments that bounce might result in further fees. Prices may be set up online using the bill payment function of your credit card provider, with the option of making the minimum payment or the whole sum. Keep an eye on your balance and activity levels if you pick this option.