If you have applied for any sort of application where credit is pulled, such as for a mortgage/refinance, personal or auto loan, credit card, even insurance rates, you know that your credit score not only is a deciding factor in whether or not you’re approved in the first place, but also at what interest rate you’re approved for, which makes a difference in your monthly payment. The better your credit score, the more favorable interest rate you can be approved for and the more you’ll save each month, so it’s important to strive for the best credit score you can.
Check Your Credit Report
These days you just never know who access to your credit information could have, whether it’s sneaking a peek at your card while you leave it out too long when paying a restaurant bill, or a retail breach send all of its customers’ information in the wrong hands, it’s good to stay on top of your credit report to ensure all accounts are up to date and accurate. From there, on your monthly credit card statement you can view your credit score to make sure it continues to rise.
Continue to Make On-Time Payments
One of the largest factors of your credit score has to do with your payment history, so making on-time payments on or before the due date is important. Being even a day late can cause a costly late fee, or even worse, an interest rate spike which could cause harm to your wallet if you carry a balance. Being thirty days late will send a blemish to the credit bureaus, and whether it was a mistake or not, could take years to come off, so it may be wise to schedule your payments in advance so you don’t forget.
Pay the Full Statement Balance Off
Just as important as your payment history comes your credit utilization, which factors in your balance compared to the credit limit. The more you get closer to your credit ceiling, the more impact your credit score will feel. While that shouldn’t scare you away from using your card for purchases, but it just makes it all more important to payoff the full statement balance every month, not only for your score, but so you don’t carry over a balance and have to be paid interest on the account until the balance is paid off.
Leave Zero Balance Accounts Open
If you have had trouble with spending the past and maybe have racked up a large balance, it could take years to get out, but once you’re on the other side of this debt burden, it certainly should be cause for celebration. Seeing the account get down to zero may give you an initial reaction to close the account so you don’t go down that path again, but you may want to give second though. If you keep the account open but cut up the card so you don’t use it, you can leave that available credit to you, while not impacting your credit score negatively by closing the account, especially if you have balances on other cards and would increase your credit utilization.
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