Now that 2017 is over and you are looking at resolutions for this year it’s time to look at improving your credit score instead of looking at a gym membership to lose weight that you will probably go for a few months until you give up and are paying each month and no longer attending. Any ways you can free up extra money, whether it’s avoiding paying for my adt, which can be a rip off, you can save on interest rates every month.
Review Your Full Credit Report
You probably think your credit score is excellent, but you never know unless you actually review your full credit report to make sure that all accounts are accurate and up to date. Keep in mind that it takes a month or two to catch up to your report for the balances to be accurate, but at least you can review to make sure that every account is legit. You can get a free copy of your credit report once a year from the major credit bureaus, although it won’t have your score, which you can see in your monthly credit card statement so make sure it is trending in the right direction.
Never Miss a Payment
Once of the largest pieces of your credit score is based on the payment history, which means you need to make your payments on time. While missing your due date will not hit credit unless it is thirty days late, even missing a day will cost you a late fee, or even worse, a spike in your interest rate. If you can schedule automated payments to be on or before the due date, you will never miss a payment.
Keep Credit Card Spending to What You Can Pay Off
The next largest portion of your credit score is based on your overall credit utilization, which is the balance compared to the available credit, so the closer you are to that balance is where your score will start to go down. If you can keep the spending to what you can afford to pay the statement balance, you will avoid paying interest if you do carryover a balance to the next month. Depending on the interest rate of your credit card and the balance on hand, you could be talking about saving hundreds of dollars a month and really chipping away at the balance.
Leave Accounts Open with Zero Balance
As you do pay your debt balance off, you may want to close your account so you don’t go on another charging spree, but actually closing that account can lower your credit score because you are taking away from your available credit. If you want to avoid using it, simply cut up the card but keep the account open. That way you can keep the available credit to your name, not have a balance, and let the account stay open and not give yourself the temptation of charging on the account going forward and getting into the same debt trouble that you had before.