Certainly there is more to live than spending all of your hard-earned money on nice cars and entertainment, and the fact that retirement will come a lot sooner than you expect, the earlier you are to start saving, the better. Sure, money can be tight once you pay the monthly bills, but between reducing necessary and unnecessary expenses, sometimes you have to make some sacrifices in order to free up extra money. When it comes to some of your monthly bills such as the mortgage, loans, and even insurance, could be even higher because of your credit score.
Check Your Credit Report
Make sure you do a thorough and total credit check at least once per year! You never who has your info these days, whether it’s someone taking a picture of your card at the gas pump and making random charge at fast food stops to see if it works, having a store’s computers get hacked and sending your card information off, or even now having a credit bureau get breached, it’s scary but all the more important reason to check your credit report to ensure that all information is being reported accurately. You can pull a free copy of your report once a year from the major bureaus, although a score will not be included, but you can get that from your monthly credit card statement so you can make sure you continue to trend in the right direction.
Make On-Time Payments
One of the largest factors in your credit score comes with the payment history, making sure that all of your accounts are paid on time. While it’s a little different when it comes to credit reporting, meaning it gets a negative impact when you are thirty days late, affecting your score, but even a day late could still cost you a late fee and an interest rate spike. Setting up auto payments is a great way to ensure a payment does not slip through the cracks.
Reduce Debt
Just as important as payment history is the amount of debt you carry compared to the available credit. The higher your debt adds up and approaches your limit, the lower your score will go. While making the minimum payment will keep your account in good standing, it will do little to bring down the balance so it’s important to make sure you can pay the largest monthly payment you can afford until the balance is gone, that way you are minimizing the interest you are paying, in addition to becoming debt-free.
Leave Zero Balance Accounts Open
When you do finally get out from underneath the debt and see that zero balance on the account, it is a great accomplishment and a feeling of relief, so much in fact you may think about closing the account so you don’t risk going down that spending path again. This can actually hurt your credit score as it takes away from your available credit, especially if you have a balance on other cards. The best you can do is to cut up the card but still keep the account open.
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