If you’re a fan of “Game of Thrones,” you can apply some of the show’s lessons to your financial life. Here are nine credit lessons the characters have inadvertently taught us over the last six seasons. (And, warning, there are spoilers ahead for those of you who haven’t caught up.)
1. Always Pay Your Debts
The unofficial motto of House Lannister is “a Lannister always pays his debts.” Whether actually true or not, it’s a fine motto for your finances. Your payment history accounts for roughly 35% of your credit score, so paying your bills on time will help keep your scores high, while late payments, charge-offs and collections will hurt it.
If you’re trying to improve your credit rating, avoid the latter at all costs. And while this category makes up the largest single chunk of your scores, it’s important to understand that 65% of your score is determined by other factors. Meaning that there’s more to it than simply making your payments on time.
2. Never Borrow More Than You Can Repay
Remember that time Sansa borrowed the Vale army from Littlefinger to help Jon Snow defeat Ramsay Bolton? If we viewers have learned anything about GOT, it’s that favors aren’t free. We wouldn’t be surprised if Littlefinger has something up his sleeve. Will he be asking Sansa will to repay the debt in some way? Will she be able? One thing is certain, you should be wary of overextending yourself financially.
Excessive debt can keep you from reaching your financial goals, like saving for retirement or a down payment on a new home. And 30% of your credit score is based on the amount of debt you’re currently carrying — or more specifically, the amount of money you currently owe your creditors. While this category looks at the total amount that you owe (credit cards, home loans, car loans, etc.), it’s the credit cards — or revolving accounts — that have the most impact on this factor of your credit score. In order to maximize your scores in this section, you should keep your balances in relation to your credit limits as low as possible (30% is good, but 10% is ideal).
3. Don’t Get Crushed by a ‘Mountain’ of Debt
Emergencies pop up in life and sometimes require racking up some significant debt. Taking on more than you can handle, like when Prince Oberyn had to fight the Mountain, sometimes can’t be avoided. Just don’t let it end up crushing you like the Mountain crushed Prince Oberyn’s head.
To get out of debt, you’ll need a plan. And while it’s easy to become overwhelmed with all the steps to get yourself out of debt, sticking to your plan is crucial. Yes, it’s easy to lose motivation, but by staying on track, you’ll soon realize just how much progress you’ve made. (You can start making your plan using this credit card payoff calculator.)
4. Make Sure You Have a Credit History
Arya Stark tried to be a girl with no name. It didn’t work out for her, and it won’t work well for you if the credit bureaus don’t know who you are when you start to seek lines of credit, like a mortgage or a car loan.
If you’ve been living a cash-only existence, it’s not that hard to establish credit. You can take out a credit-builder loan, get a secured credit card, use a co-signer or numerous other options. Just remember, building good credit takes time. (You can monitor two of your credit scores for free every month on Credit.com to track your progress.)
5. Remain Vigilant
“Game of Thrones” characters who let their guard down don’t last long. Take heed and be ever-watchful of your credit and bank accounts for signs of fraud. An identity thief may take over your bank account and drain your balance, charge a credit card up to the limit, open a utility or mobile phone account in your name, and apply for credit and loan accounts, sticking you with the bills and a damaged credit history to clean up.
To ensure your accounts are secure, it’s a good idea to regularly check your credit. Any unexpected changes in your score could signal identity theft, and you should pull copies of your credit reports (you can do that for free once a year) to investigate further. It’s wise to act fast to protect your credit — and your finances.
6. Great Credit Takes Time
Daenerys Targaryen may be a queen now, but she didn’t always have life so easy. An orphan with a jerk of a brother who promised her to a seemingly coarse heathen, Khal Drogo, Daenerys made the most of her situation and turned every opportunity in her favor.
An excellent credit score can avail you to some of the best rewards credit cards available, but if you’re just starting to build credit, you may want to start with a card that’s simpler, with low or no annual fees, low interest and late payment forgiveness.
7. Let the Past Be Your Guide
Brandon Stark has visions of the past, but you don’t need paranormal abilities to learn from your past credit mistakes. Whether you’ve made late payments, had accounts sent to collections or gotten yourself into too much debt, time and persistence can heal your credit. Just don’t repeat your errors.
8. Don’t Be Afraid to Fight Back
Mistakes happen, but errors on your credit report aren’t something to take lightly. They can have a significant negative impact on your credit scores, making it harder for you to get the credit you deserve. Don’t be afraid to harness your inner Daenerys and unleash your dispute dragons. Filing a dispute with the credit bureaus is fairly simple, though the resolution can take some time. (Some people opt to hire a credit repair company to do the work for them. Here are some tips for picking a good credit repair company.)
9. Make a Big Return
Jon Snow came back from the dead, which is a lot harder than fixing your credit, even after a bankruptcy. Fortunately, you don’t need the god of light or Melisandre to help you do it.
The first thing you need to do is get your credit reports and credit scores to understand just what you’re dealing with. You should get your credit reports from each of the major credit reporting agencies, since each report may contain different data that could impact your credit scores. You’ll rarely know which credit report is being pulled by a lender, so it’s important to make sure all of them are accurate and you’ve addressed any (and all) issues.
More on Credit Reports & Credit Scores:
- The Credit.com Credit Reports Learning Center
- What’s a Good Credit Score?
- How Credit Impacts Your Day-to-Day Life
Image: Erik Khalitov