If you’ve applied for a mortgage, loan, credit card, or even a job these days, your credit score is the first impression that you can give that shows your history as being a responsible borrower. The higher your credit score, the better the interest rate on the market that you can see, and as the interest rate goes up, so does your monthly payment. In order to maximize saving and paying as little interest as you can, then boosting your credit score should be a priority now if it hasn’t already.
Check Your Credit Score
These days you just never know who your information could possibly have, as card information can be swiped at the gas pump, or even department stores are getting hacked to have your data compromised, and even credit bureaus are not all that safe any longer. By reviewing your credit report at least once a year, offered free by the major credit bureaus, you can ensure that all accounts are as up to date and as accurate as possible. On your monthly credit card statement, you can view your credit score to ensure that you continue to trend in the right direction.
Make On-Time Payments
One of the most important pieces of your credit score is your payment history, but it’s when you go thirty days late is when it’s reported to the credit bureaus. While missing even a day will not be reported, but you can still be charged a late fee or an interest rate spike, so it’s important that payments are made on-time, with automated scheduled payments if that helps. Any blemish in your payment history can do serious damage to your credit score and could take as much as seven years to come off.
Charge What You Can Afford
While not only is charging what you can afford good when it comes to staying within your household budget so you don’t go into debt, but it also factors in with your credit score, being as important of a factor as your payment history. The more you charge and reach your credit limit, increasing your credit utilizing will drastically lower your score. While using a credit card for every purchase is a good idea when it comes to earning rewards such as points or cashback, not paying off the entire statement balance and carrying over debt will not only cost you interest payments each month but will hurt your score as well.
Leave Zero Balance Accounts Open
If you have gotten into spending trouble in the past and racked up a large credit card bill, it may have taken years to finally get out, but when you finally see that zero balance on the account, you may be tempted to close the account so you don’t get yourself into the same mess, but that may actually hurt your score. If you have balances on other cards, it could actually increase your credit utilization because you are removing the available balance on this card. If you cut up the card so you don’t use it, but keep the account open, you could have the best of both.
