Credit coaching is a service designed to help you understand your credit and achieve a higher credit score.
When people seek out a credit coach, they are usually trying to improve or rebuild their current credit. Often they are in need of guidance on how to increase their credit score with better financial habits that can be implemented into all aspects of their lives.
Having a credit coach help you improve your credit can be crucial to your next big financial purchase like a new car or home, as well as smaller approvals like unsecured credit cards, or lines of credit.
The difference between credit coach and a financial advisor
While a credit coach and a financial advisor can sound like the same thing, they are actually very different.
Credit coaches help you understand which items on your credit report are holding back your credit score and how to address them.
For example, if you are using more than 30% of your credit card limit and not paying it off every month, your credit coach would provide you with a customized plan on how to better manage your finances so that you are spending within your budget.
Credit coaches also check in with clients regularly to make sure they’re achieving their credit goals based on their Equifax and TransUnion scores.
Financial advisors do not act as guides or coaches. Instead, they enter the picture when you have already built or rebuilt your credit and are ready to start on your investment journey.
Unlike credit coaches, financial advisors look at the amount of money that you have saved for an investment and advise you on what stocks or shares to buy based on the investment risk level you are comfortable with, and how the stocks or shares are doing in the market at the current time of investment.
How does a credit coach guide your financial journey?
When you first meet with a credit coach, they will start with the fundamentals of credit by teaching you how to read your report, so that you can learn what is considered a low credit score (under 650), and what factors affect your score.
Throughout your consultations, a credit coach will advise you on how to clear any items that are in collections which would be marked as a 9 on your credit report. If you have any recently added collection items, they will work with you to clear them off your credit bureau as soon as possible.
If you have any active credit cards, a credit coach will also advise you to try to use them rarely (think once or twice a month) and pay off the balance right away in order to raise and restore your credit.
If you don’t have any active credit cards, or are just starting your financial journey, a credit coach will advise you how to make sure that you have tradelines reporting to credit bureaus. This could be through a secured credit card like the EP Climb Credit Card, a cell phone contract or an EP Climb Credit Accelerator savings plan.
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