MEMPHIS, Tenn. --Warmer, spring weather typically means consumers spend a bit more time out, looking for that new car or house.
However, if people need a loan for those big purchases, the true cost will heavily depend on their credit score.
Audra Malone loves to travel.
"I'm going to Alaska in September," said Malone who added she's already paid for the trip.
Tracy Harmon works for Operation Hope and she's Malone's financial counselor.
Malone initially raised her credit score by 25 points and gained even more financial freedom after completing the program.
She just helped her daughter by a car.
Malone said, "Got her a 2015 and with my good credit, she only has a $200 car note."
Malone's journey started with learning to budget. Harmon taught her a little trick using a plastic, sandwich bag.
"Everything I spend, I put my receipts in this bag and at the end of the month, I pile them up. My needs and my wants."
Harmon said after looking at the 'wants' pile, "If you have nothing to show for it at the end of the month, then that's money that could have been in your savings account."
Those savings could go toward paying down debt, which raises a person's credit score.
Think of your credit score as pie chart where the total is 100%.
Here's how it breaks down:
- Payment history-35%
- Credit utilization-30%
- Length of credit history-15%
- New credit-10%
- Credit mix-10%
Credit Score Killers
Payments later than 30 days get reported and collections really hurt. Harmon said believe it or not, the higher the score, the harder the fall.
"I've seen where an individual can have one collection and it could drop their score from 30 to 50 points."
#2-Reaching max limit on credit cards
Harmon explained a good rule of thumb.
"Make sure that your balances on your credit cards are no more than 30 percent of your credit limit."
Harmon told WREG closing accounts after they're paid off can hurt a person's credit score.
"If you have an account open let's say five to 10 years, and you close it out, you lose all that good pattern of payment history."
Malone still uses her plastic bag and adapted what she learned to change her financial habits.
"You've got to learn that to keep your credit score up, you can't swipe away."
- Get a free copy of your credit report
- Check for errors
- See if your bank or credit card company offers free credit scores
- Don't pay credit repair agencies for help when free, counseling services are available
Click here to find Operation Hope locations in the Memphis area, or call (901) 318-1264.