Easy As 1-2-3

How to build or rebuild credit, no matter where you're starting from.

Step 1 - Give Back

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The first step of Color My Credit's Easy As 1-2-3 method is all about shifting your mentality in how credit cards should be used and enacting positive change in the world around you.

This means you need a revolving account (a credit card) reporting positive financial discipline.

You need a credit card.

If you don't currently have an open credit card, or have high balances on the cards you have and can't pay them down, we recommend the OpenSky credit card.

  • No credit check, which almost guarantees anyone is approved
  • Secured credit card, which means you pay a deposit to open the card
  • Your deposit determines your credit limit. There is no value in a higher limit, so we recommend the minimum, which is $200.
  • There is a $35 annual fee, which will be charged to the card once opened.

After you're approved...

  • Make a $15 payment immediately, which will leave a $20 balance on the card.
  • Let the card report that $20 balance to the credit bureaus. You can use Credit Karma to track daily updates and know exactly when this happens. It will usually be 5 days after your due date. This reporting date is also known as the statement closing date.
  • Once the balance is reported, pay the card to $0.
  • Make another $20 charge, and wait for the new balance to report.
  • Repeat this process monthly.

Why does this work?

By using no more than 10% of your available limit each month, you're demonstrating good financial discipline, as opposed to someone who carries a high balance over a long period of time.

Why "Give Back"?

For your monthly $20 charge, we recommend using this card to Give Back to someone who could use some help. Use it for a regular charitable donation, or purchase a gift card for someone in need. Empower yourself and those around you by building good credit and spreading some joy at the same time.

Step 2 - Be Present

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The second step of Color My Credit's Easy As 1-2-3 method is about taking what Step 1 has taught you, and essentially repeating the process with a twist that helps you reward yourself at the same time.

This means you need a second revolving account (a credit card) reporting positive financial discipline.

Depending on how long you've been building with your OpenSky credit card, you'll have more options for a second credit card. We normally recommend a Discover card, which could be secured or unsecured depending on your credit history.

After you're approved...

  • Make sure to pay down any annual fees charged upon opening the card as soon as you can, down to the last $20.
  • Let the card report that $20 balance to the credit bureaus. You can use Credit Karma to track daily updates and know exactly when this happens. It will usually be 5 days after your due date. This reporting date is also known as the statement closing date.
  • Once the balance is reported, pay the card to $0.
  • Make another $20 charge, and wait for the new balance to report.
  • Repeat this process monthly.

Why does this work?

By using no more than 10% of your available limit each month on two accounts, you're demonstrating good financial discipline as well as following the recipe to build the perfect credit profile by having two revolving accounts open both reporting positively.

Why "Be Present"?

For your monthly $20 charge, we recommend using this card to Be Present for yourself or those around you. This could include paying for a subscription service you enjoy, or sharing a meal with a loved one. Reward your progress and promote joy in whatever you choose.

Step 3 - Pay Yourself

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The third step of Color My Credit's Easy As 1-2-3 method is about using a different type of account, an installment loan, to build positive payment history.

Your credit cards are both revolving accounts. This means that you are given a spending limit, and you can choose how much to borrow and how much to pay back each month.

In step 3, we will be using an installment account. This means that you borrow a set amount of money, and you have an agreed upon amount that you pay every month. There is no variation, and you never go back to borrow more. For this step, we recommend Self Lender.

What is Self Lender?

  • Self reports to all three credit bureaus, which is essential in building positive credit history.
  • It's essentially a savings account that reports to the credit bureaus as an installment loan.
  • At the end of your Self Lender term, you receive a check for the balance of the payments you've made, minus interest and fees.

Why does this work?

By making as-agreed payments on an installment account, in combination with your positively reporting credit cards, you're demonstrating that you have the ability to make as-agreed payments on a classic loan model, similar to a car payment or mortgage.

Why "Pay Yourself"?

While Self Lender reports to the bureaus as a classic installment account just like a car or home loan, you're actually building a balance with them instead of paying back something loaned to you. At the end of your Self term, you are paid back the balance of the "loan" you took out with them!

Need one-on-one help?

Feel like you need some one-on-one help? That's okay. We got you.

✍️ One-on-one consultations with Alisa are available for you
✍️ Book a time right on this website, send Alisa your credit reports, and she'll work out a plan specific for you
✍️ Get on the phone with Alisa so she can go over your own customized plan of action, and get your credit questions answered

Available in 30-minute single sessions, 60-minute couples sessions, or 90 minutes of in-depth coaching split over 3 sessions

Book a Consultation Today