Money at 30: My Quarterly Credit Progress Report
It’s now been nearly three months since I made my debut on Dyer News and shared my newfound appreciation for personal finance and credit. In that time I’ve not only learned more about the complexities of finance but have also seen some positive improvements in my own credit. So to mark the end of my first quarter I thought I’d share some of the changes I’ve been making in my own life and the results I’ve seen so far.
Saving money in both meanings of the phrase
Over the past few months I’ve ended up opening three accounts with Discover. This includes having a credit card, cash back checking account, and a savings account with the company. In tandem (or whatever the equivalent is when three items are involved) these accounts have allowed me to sock money away as well as earn a healthy amount of cash back without any negative side effects to speak of.
First I have gotten into the habit of moving the majority of my money from my regular checking account to my savings account, which has now amassed nearly $2,000 — not a bad start. While my latest interest won’t be paid until the end of this month, currently I’ve earned a whopping $.75. I joke about the “whopping” part of course but, to be fair, that’s $.75 I didn’t have before. Plus, as the account grows, that interest figure will eventually turn into something much more significant.
On the credit card and checking front, I feel I’ve been pretty successful in maximizing the benefits of both cards. Between the two of them — and thanks in major part to the current 5% cash back I’m getting on Amazon and department store purchases until the year’s end — I now have nearly $20 of cash back ready to be used. Best of all I still have nine months of earning left before Discover sends me a check matching my first year’s efforts.
Credit limit workarounds and score increases
Perhaps the only disappointing thing about my Discover card was that I was only offered a $4,500 credit limit to start off. Now it’s not like I have or plan to spend more than $4,500 at a time but my goal with this card was to maintain a utilization rate of under 10%. In order to do that I’ve taken to making multiple payments toward my balance each month. That way I can still earn rewards but also keep my balance low. Plus, since I have yet to figure out when exactly it is that Discover reports my balance, I’ve been keeping a close eye on what I’ve spent so I’m ready to make a transfer as soon as possible.
This strategy seems to have worked well as two things have recently risen: my limit and my credit score. The other day I was surprised to get an e-mail from Discover saying that they were bumping my limit up to $5,600. Naturally this was welcome news, especially since my initial plan was just to wait until the six-month mark to request an increase. However the real surprise came a few minutes later.
Along with my statement each month, Discover has also been sending me my FICO credit score — or one of them, at least. From September to October they noted my score increased from 757 to 761. But this month it magically jumped to… 811! Incidentally that score is even higher than either the ones Credit Karma currently shows for me, even though I had previously stated that I thought the site was being a little generous with their figures. In all honesty, there probably isn’t a ton of difference between having scores in the 760 range and those above 800, but it’s still an exciting feeling nonetheless.
Feeling more generous
I don’t know if it’s the wonderful cash back or the growing rainy day fund of savings that has me in such a good mood lately but I’ve found myself more willing to give. In the past three months I’ve donated to political campaigns, Kickstarter projects, and a friend’s honeymoon fund. These are all things that, in the past, I may have rolled my eyes at but now felt compelled to throw a few dollars at without much worry or contempt.
Somehow it seems that having better financial habits also makes me feel like being a better person — who knew?! Granted, giving away money isn’t necessarily a great personal finance principal, but it does admittedly feel good to have the ability to give to worthy causes. If nothing else this apparent change of heart points to the enhanced feeling of financial security that has set in over the past few months.
Alas that is all I have to report on for my first fiscal quarter. However, with the holidays ahead, the next three months could admittedly get pretty interesting. As a result I’m sure I’ll have plenty of lessons learned to share in the coming weeks. And — just in case I forget to say it enough — thanks for joining me on this financial journey so far.