Look to Start the New Year with Improved Credit

Whether you are looking to purchase a home or refinance a current mortgage, even take out a personal loan, or apply for a credit card with an improved rewards system over your current card, your credit score will not only decide if you are approved or not, but will be the deciding factor in the interest you’re charged.  The difference in a percent can be huge when talking about a few hundred-thousand-dollar mortgage, and even an inflated rate on a credit card can cost plenty if you happen to carryover a balance.  Why pay more than you have to in interest if you can keep your credit score where the potential lenders will be fighting over your business.

No Late Payments

While you will not get dinged on your credit report for being a few days late if you forgot to make your payment, although it may still cost you a late fee or a spike in interest rate, it’s when you reach thirty days late that a negative mark hits your credit report and can even take up to seven years to fall off, and there’s no fighting it.  By making your payments on time every month, you can prove to be a worthy borrower and continue to boost your credit score every month that your payments are made on time.  If you are having trouble juggling payments, you can always schedule to be paid on the due date every month, even if it is the minimum payment.

Avoid Carrying Over a Balance

While easier said than done if you’re already in credit card debt, but if you can climb out and pay the full statement balance every month, you can avoid getting charged interest, which depending on the balance, let’s say 16% interest rate, your minimum payment will likely cover the interest and a few dollars additional, making all more important to making the only the minimum payment a regular occurrence.  While it will keep the account current so you’re not late, but it will extend how long it takes you to pay off the balance.  It’s a vicious cycle that continuing to charge on the account every month but not being able to pay off, getting charged interest, and pretty soon you’re up to your neck in debt.

Stay on Top of Your Score

With the amount of fraud these days, whether it’s having your information taken, or even grabbed during a retailer’s security breach, you can never be too careful as it’s easy for your info to end up in the wrong hands.  Checking your full credit report every year for free from the credit bureaus, or a service like Credit Check Total, is a great way to look at the full picture, but will not show the score.  If you look on your monthly credit card statements it will actually list the score so you can see month over month on where your score is at, so if you see a sudden dip you know to investigate further, but otherwise if you’re staying on top, you should be able to see your score rise every month so that when you do apply for credit, you can take advantage of the best interest rates on the market.

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