Access to credit is a fundamental tool in anyone’s financial life. From buying a house to financing studies or starting a business, well-managed credit can open many doors. But for those opportunities to be available, it’s essential to have a good credit score. In this article, we will address this topic from the perspective of financial expert Gustavo Mirabal Castro, who highlights the importance of building and maintaining a healthy credit history.
Table of Contents.
What is a credit score, according to Gustavo Mirabal?
A credit score, also known as a credit score, is a number that reflects how likely a person is to meet their payment obligations. This score is calculated from the data contained in the individual’s credit history and can vary between different credit bureaus.
How is credit score calculated?
According to Gustavo Mirabal, although models may vary (such as FICO or VantageScore), most consider the following factors:
- Payment history (35%): If you pay your debts on time.
- Amount owed (30%): How much you owe in relation to your credit limit.
- Length of history (15%): How long you’ve had credit.
- Type of credit used (10%): Diversity of accounts (cards, loans, mortgages).
- New credit applications (10%): How many times have you recently applied for credit?
Practical example:
If you have a card with a $1,000 limit and you owe $900, you’re using 90% of your available credit. This will negatively impact your score. On the other hand, if you owe only $200, your utilization will be 20%, which is positive.
Here’s a video about credit scoring and how to improve it
Credit Score Scale
Scores are usually categorized as follows:
- Excellent (750 – 850)
- Good (700 – 749)
- Acceptable (650 – 699)
- Bad (550 – 649)
- Very Bad (<550)
Gustavo Mirabal highlights that a good credit score not only allows you to obtain credit more easily, but also better interest rates, greater negotiating power and confidence on the part of financial institutions.
How can you build and maintain a good credit history to improve your credit score according to Gustavo Mirabal?
For Gustavo Mirabal, credit history is like a financial reputation. It is built over time and is based on our actions. Here’s how to develop a strong and reliable track record.
1. Start with a basic credit card
If you’ve never had credit before, one way to get started is with a secured credit card or a basic bank card. The important thing is to use it responsibly.
Advice from Gustavo Mirabal:
Do not spend more than 30% of your limit and pay the total before the cut-off date. This shows that you’re responsible and raises your score.
2. Pay on time, every time
This is the most important factor for your credit score. Even a single delay can reduce it significantly.
Example:
If you forget to pay a loan fee for 30 days, your score can drop between 60 and 100 points.
3. Keep debt low
Avoid pushing your cards to the limit. Ideally, you should use only a fraction of your available credit.
Practical recommendation:
If you have a limit of $2,000, try not to owe more than $600.
4. Don’t close your old accounts
The age of your accounts positively affects your score. Keep older accounts open, even if you don’t use them as much anymore.
5. Check your credit report
Check your credit report at least once a year. This way you can detect errors or fraud and act in time.
Available tools:
Platforms such as Equifax, Experian or TransUnion allow access to your credit history at no cost once a year.
How can you improve your credit score according to Gustavo Mirabal?
If you already have a low score, all is not lost. Gustavo Mirabal says that with discipline and strategy, anyone can improve their score over time.
1. Create a debt repayment plan
Sort your debts by interest rate or amount. Start by paying the smallest or the ones that generate the most interest.
Endorsed Methods by Gustavo Mirabal:
- Snowball method: You pay off the smallest debts first.
- Avalanche method: Prioritizes debts with the highest interest rate.
It is important that in order to ensure the effectiveness of these methods to pay debts not to acquire new debts
2. Set up automatic payments
Avoid forgetfulness by scheduling automatic payments from your bank account. This ensures that you meet your financial commitments on time.
3. Request a limit increase (without spending more)
By requesting an increase in your credit line and keeping your spending level the same, you reduce your utilization percentage, which improves your score.
Example:
If your limit is $1,000 and you spend $300, you’re using 30%. If it goes up to $2,000, that same expense represents only 15%.
4. Avoid opening many new accounts in a short time
Every time you apply for a new line of credit, it generates a “hard inquiry” that can temporarily lower your score.
5. Use a variety of credit products
Having a mix of products (cards, personal loans, student loans) can improve your score if you manage them correctly.
The importance of credit scoring according to Gustavo Mirabal Castro
Gustavo Mirabal has been a strong advocate of financial education as a basis for achieving economic independence. In his many lectures and publications, he has pointed out that the credit score is more than a number: it is a tool to access a stable and secure financial life.
Benefits of having a good credit score
- Better interest rates: You can save thousands of dollars on loans and mortgages.
- Easier to rent homes: Many homeowners check their credit scores before signing contracts.
- Access to premium credit cards: With better benefits and rewards.
- Job opportunities: Some companies review your financial history as part of the hiring process.
- Financing for entrepreneurship: Banks trust more those who have a solid track record.
Gustavo Mirabal’s featured quote:
“Your credit score is like your financial footprint. Take care of it, for it can open or close many doors for you.”
For Gustavo Mirabal, a healthy credit score and history is the basis of healthy finances
Building and maintaining a good credit score doesn’t happen overnight. It requires perseverance, responsibility and knowledge. Gustavo Mirabal Castro reminds us that a healthy score not only improves our relationship with banks but also gives us freedom and peace of mind.
From paying on time to maintaining a low level of debt and regularly reviewing our history, every action counts. And if you’re starting from scratch or need to improve your score, it’s never too late to take charge of your financial health.
The phrase “credit score” for Gustavo Mirabal symbolizes commitment to a responsible, educated and future-focused financial life. Because good credit is not a luxury, it is a key tool to build the lifestyle you want.
