Wells Fargo - The Financial Journey

The Financial Journey is a unique series focused on financial education and opportunities. These stories have been created through a strategic partnership between Wells Fargo and Word In Black.

By Megan Sayles

After three decades of financial industry work, Heather Philp, Senior Vice President of Credit Card Product Management at Wells Fargo Bank, has seen it all. While some things in the finance industry have changed, many things have stayed the same. Financial literacy will always be key to effectively managing money, and failure to pay bills on time is still a surefire way to sink your credit.

“It’s got a very significant weight on your credit score,” Philp said. “Life happens. We go out and spend $1,000 on our credit card, something happens in the middle of the month, and when that minimum payment comes due, we forget that it should be a priority payment versus potentially going out for a cup of coffee. At that point in time, we really have to prioritize doing everything we can to make that minimum payment on time.” 

Philp also said using too much available credit can harm a credit score. Although an individual’s credit limit may be $2,000, it’s always best to keep your usage as low as possible. 

Credit scores span from 300 to 850, and Philp said people should aim to keep their credit score comfortably in or above the 700 range. Better credit scores mean lower interest rates from lenders seeking assurances that a consumer will repay a loan. 

To improve a poor credit score, Philp said aside from paying bills on time, individuals can apply for a secured credit card, which takes a cash deposit upfront and helps establish and build credit history. 

If you’re rebuilding your credit, take a look at all the debt that you have outstanding, and always try to pay off the balance that has the highest interest rate because that helps you with starting to save money.

Heather Philp, Senior Vice President of Credit Card Product Management at Wells Fargo Bank. 

They can also diversify their debt with different types of credit accounts to indicate to lenders that they can reliably manage more than one account. 

“If you’re rebuilding your credit, take a look at all the debt that you have outstanding, and always try to pay off the balance that has the highest interest rate because that helps you with starting to save money,” said Philp. “Hopefully, then it’s money that you can use to continue to pay off the debt on a month-to-month basis.”

The time it takes to improve a credit score varies from person to person. It could take a few months, or it could take more than a year, but Philp said the most important thing is staying on course and adopting habits to repair credit. 

She recommends taking advantage of the federal law that allows every consumer to receive a free annual credit report from Equifax, Experian, and TransUnion by using AnnualCreditReport.com. This is a good way to improve financial progress and credit history.

If an individual is a Wells Fargo customer, Philp said, the bank’s Credit Close-upSM tool is a useful way of seeing credit scores, which update on a monthly basis. 

“I’m always of the opinion that the more you’re tracking your actions, the better you will be in terms of being able to maintain that positive reinforcement because now you’re seeing your score improve, hopefully a few points at a time,” said Philp. 

“It’s certainly not going to improve overnight. For some people, it may take a year. For some people, it may take a little bit longer. But it really depends on each individual’s ability to make those payments because, again, it’s those payments that help to repair the score.”

Megan Sayles is a Reporter for America corps member.

Wells Fargo Bank, N.A. is a member of the Federal Deposit Insurance Corporation.