If you were asked what was your credit score, or even not to the number, but whether it was ‘excellent’, ‘good’, or ‘poor’, what would you say? Chances are you just assume your credit score is ‘excellent’, until you go to apply for a refinance to lower your interest rate and you’re either charged a higher interest rate because of your low credit score, or denied altogether. While your credit score may not be the first thing on your mind, it should be a focus to ensure your interest rates stay the lowest on the market to save yourself the most money over time.
You Never Know
These days, you hear so much about retailers getting hacked and customer’s information being leaked out, or having a picture of your card taken while you swipe at the gas pump, or even while you leave the card out too long while paying a restaurant tab, fraud is everywhere and can happen in a matter of seconds. By reviewing a full copy of your credit report, even it it’s a free copy that’s offered once a year, it still gives you a chance to review all of your information to ensure it’s accurate. Just keep in mind the report can be a month or two behind catching up to what’s current, if you are expecting to see a recent payment made, for example.
Not Paying Off Full Statement Balance
One of the quickest ways to get into debt is to charge more than you can afford, not be able to pay back the full statement and carryover a balance to the next month, getting charged interest, and doing the same every month. Paying only the minimum will only satisfy the account for that month, so to really put in some damage to the balance would be to stop charge, pay it off, and give your credit score a boost as you pay down the balance and the available credit opens up a little more.
Closing Zero Balance Account
If you have found yourself in debt that has taken even years to get out of, you may be so happy to accomplish getting out of that hole that you close your credit card account so it never happens again. While I can’t blame you for that reaction, you may want to reconsider as closing the account will reduce that available credit so if you have balances on other cards it can actually hurt your credit score, not to mention closing that length of account. If you don’t want to use the card anymore just simply cut up the card, but leave the account open.
Careless with Payments
It may sound like common sense, but you have to pay your bills on time, especially those tied to credit, as while even being a date late can cause a late fee or an increase in interest rate, but when you hit thirty days late you will be reported to credit which can drastically reduce your score, not to mention stay on there for years to come. It may be a good idea to schedule payments in advance if you do find yourself being a little forgetful with your finances.