While most of us now are paying attention to see is lyft or uber cheaper when we are going out on the weekends, your credit may not be the first thing that comes to mind when you are going about your daily life. In fact, most will make losing weight a priority this year, while others will put finances a priority, in which they will try and reduce spending and put more of a focus on saving for the future. While putting your finances front and center is great, you don’t want to overlook your credit as well.
Check Your Credit Report
These days you hear about fraud so much, whether it is someone taking your information at the gas pump or having a store’s computer be compromised, that it’s a good idea to check your credit report at least once a year. The good thing is that the three major credit bureaus offer a free copy of your report once a year, although it will not have your score. You can see your score on your monthly credit card statements, so you can ensure your score is moving in the right direction after you have checked your report for accuracies.
Make On-Time Payments
A large part of your credit score has to do with your payment history, and while even being a day late from the due date could cost you a late fee or an interest spike, it’s when you become thirty days late that will be reported to credit, and unfortunately, whether it was a mistake or not, could stay on there for up to seven years. When it comes to paying bills, it’s smart to automate payments on or before the due date to make sure that no payments are missed.
Pay Down Debt
Just as important as payment history is your overall debt compared to your available credit. The higher your overall balance approaches your limit, the lower your credit score will be, so paying down debt should be a priority, not only for your score, but to also get rid of those interest payments that you are making every month and finally free up money to put towards building an emergency fund, saving for your future, and even taking a vacation is better than paying interest on a mortgage, loan, or credit card. The larger payment you can afford each month will chip away at the balance compared to making the minimum payment where most goes towards interest anyways.
Leave Zero Balance Accounts Open
It is quite an accomplishment to get out of debt, so much in fact you’ll want to ensure you don’t ever go down that path again so you probably are thinking about closing your credit cards with zero balance. This can actually hurt your credit score because it takes away from your overall available credit, so if you want to avoid using the card, you can cut up the card and toss in the garbage but still leave the account open in your name.
