When you are looking at what you can improve upon yourself in 2018, credit is probably not high on the list, at least something you think about often enough to make an improvement. First is probably losing weight, but like most the join gyms in January, you’ll stop going by summer and continue to pay each month without going. Credit is something that by having a great score you can take advantage of the best interest rates on the market, lowering monthly payments of mortgages and loans.
Make On-Time Payments
A large portion of your credit score is based off of your payment history, so you’ll want to make sure they’re paid on time, one because if you go past the due date you are likely to get hit with a late fee or even worse an interest rate spike, but if you go over thirty days late, that is when it hits your credit report. Even if it’s an oversight on your part and you go thirty days late, it can stay on your credit report for up to seven years, so you want to make sure you set up automatic payments on or before the due date.
Pay Down Debt
Now that’s it a new year it’s time to change your old spending habits and start to save money so that you can free up extra money each month to pay down debt. So instead of searching online for car accessories for girls, you can put your money to good use and pay down debt so that you can avoid payment interest every month and be able to use that extra money for more important things such as building an emergency fund or saving for your future, which if you aren’t careful, will come up quickly, leaving you unprepared.
Don’t Close Accounts with $0 Balance
When you do finally pay off your credit cards, your first instinct may be to close the account so that you don’t have to fight the urge to go on a spending spree. Closing the account can actually hurt your credit score because it takes away from your overall available credit, and if you have balances on other cards, it can increase your credit utilization. If you want to avoid using the card, just cut up the card and throw it away, but leave the account open to keep the available credit.
Unfortunately improving your credit score will not be fixed overnight; it can take years and years, so don’t be frustrated if you aren’t seeing huge results right away. You can check your score each month on your credit card statements, so you can see your score trend in the right direction as long as you are making the right moves each month and not continuing to build up your credit card balance. It will take patience but will be completely worth it when you are getting the best interest rates on the market and lowering your monthly expenses payments, freeing up plenty of extra money.