Of the many aspects of your life that you are looking to improve, credit may not top the list, but that may not be a good thing. If you are looking to purchase or refinance a mortgage, get a personal loan, a better credit card, or even apply for a job these days, your credit score can give a picture of your entire financial outlook in three numbers, so it’s best that you strive for the top.
Check Your Credit Report
With the amount of fraud that occurs nowadays, unless you check your credit report regularly, you could have no idea if all the information is accurate unless you review your full report. The three major credit bureaus offer a copy of your credit report for free that you can pull each year, although your score will not be included. To see your score, you can view your monthly credit card statement that is included, and then you can focus on seeing your score improve month over month so that you can strive for greatness and continue to trend upwards even more.
Be Sure Every Payment is On-Time
One of the largest pieces that makes up your credit score is your payment history, so it’s important to make your payment on time each month, although missing the due date will not be reported to credit until the payment is thirty days late, but even missing a day could cost you a late fee and even worse, a spike in your interest rate. If you do fall thirty days late, mistake or not, that blemish can remain on your credit report for up to seven years, so it’s important to make sure you are scheduling for your payments on time, if not earlier.
Get Out of Debt
The next largest piece of your credit score, equally important as your payment history is the overall balances compared to the available credit. The higher the balance and closer to your available credit will eat up your credit utilization and therefore lowering your credit score. The more you can pay off debt you will raise your credit score and free up money every month to then finally keep in mind those penny stocks to watch, which if you’re making large credit card payments every month it can take away from other important areas such as building an emergency fund or saving for retirement.
Don’t Close Credit Card Accounts
Getting out of debt is a major accomplishment, one that you should be proud of, and you may be tempted to close out your account once you get down to a zero balance so that you don’t get tempted to use the card anymore. By doing this, however, you could be doing damage to your credit score as you are taking money away from your available credit and if you have balances on other accounts, increasing your credit utilization and lowering your score. If you don’t want to use the card you can simply cut it up, but still keep the account open.