The Basics — Credit Score

Tony and I are not wealthy — we’re both gainfully employed in jobs we like, but not jobs that pay exceptionally well (hooray for public education). Still, we’ve been able to find a way to successfully travel without going in to debt. How? Travel hacking. Travel hacking is a term that loosely refers to the process of earning “points” to use for discounted/free hotel and air travel, taking the most expensive aspects of travel and removing them as a hindrance to seeing the world.

This post will be the first of many that will explain the process that we’ve taken to build up points. Today we’ll focus on understanding your credit score and how your score will affect the way you get started with travel hacking.

Credit Score 

In order to take advantage of lucrative sign-up bonues from credit card offers, it’s important to know and monitor your credit score. It can’t be overstated, maintaining a strong credit score is imperative to this hobby. Individuals with less than ideal credit score will first need to focus on building good credit before you can take advantage of many credit card offers. Travel hacking is about responsibly using credit to build points — NOT about going in to debt; its about enjoying traveling the world and saving money over the long term. If you are unwilling or unable to committ to paying off your credit balance(s) in full each month, this is not the hobby for you.

To get started, we recommend using a credit monitoring service such as Credit Karma or Credit Sesame. These are both free monitoring services that give you your credit score and include features that allow you to estimate the impact on your score were you to open additional lines of credit. There are hundreds of blog posts and strategies regarding sign up strategies and “app-o-ramas”, but keep in mind that it’s best to start slowly and monitor your credit score before signing on the dotted line for multiple cards at once. Remember, a solid credit score is vital to your travel hacking success.

Your FICO credit score is broken down into 5 categories:fico


  1. Payment History — 35%
  2. Outstanding Debt/Amount Owed — 30%
  3. The length of your credit history –15%
  4. New credit inquiries — 10%
  5. Types of credit in use — 10%

There is no exact algorithm that you can use to estimate your credit which is why its best to use a free monitoring service to know your individual score. In general, those that do not have a credit history will need to slowly open lines of credit and responsibly pay them off to build their credit score. Those who have a history of late or missing payments will need to establish a track record of on time payments and reduce the number of debts owed in order to improve their score.

There are certain cards available to those with less than stellar credit that can help to build scores (usually with low credit limits and limited bonuses). In general, those with good credit scores (>700) will in most circumstances be approved for the credit cards that offer the highest bonuses and earn rates. Banks typically offer a hefty points or mileage bonus as an incentive for consumers to open an account with them. These cards typically have a spending minimum that must be met within the first 30-90 days of the account opening. Once the minimum has been met, the bonus miles or points will post on the statement close date. The miles or points will then be credited to your frequent flyer, bank, or hotel account and will become available to redeem for flights, nights, or other travel expenses.

Biggest take away? Know your credit score. If you’re already sitting pretty, then you can get excited about taking advantage of credit offers with big bonuses. If your score needs a little TLC, don’t despair. Take the time to build up your credit score through smart, sensible financial decisions (consistent on-time payments, reduce your number of debts, etc.) and your hard work will pay off as your score rises.


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