If you have applied for a mortgage, personal loan, or a credit card, you know that not only is your application approval process decided by your credit score, but also the interest rate at which you are approved for. The higher the credit score, the more opportunity you have to get the best interest rate on the market, which will save you the most money not only every month you carry over a balance, but for the life of the terms. By making sure you stay on top of your credit, you can start boosting your score now.
Check Your Credit Report
These days you can never be too careful when inserting your card at the gas pump or leaving your card out in the open after you pay for your restaurant or bar tab, that in a matter of seconds, someone can take a picture of your card and begin making fraudulent charges in no time. By at least pulling your credit report once a year, for free from the major bureaus I might add, you can make sure that all of your accounts are up to date and accurate.
Make On-Time Payments
One of the largest pieces of your credit score has to do with your payment history, and that is making sure you do not go thirty days past the due date, otherwise it will show up on your credit report and could take up to seven years to come off. While even being a day late will not reflect in your score, you can still get hit with a late fee or interest rate spike, so it’s important to make sure that payments are made on or before the due date, even if that means scheduling in advance so you remember.
Pay Off Full Statement Balance
Just as important as your payment history is the amount of credit utilization that you have used up, so the closer you reach your overall credit limit, the more your score will decrease. While there may not be anything wrong with using a credit card for all purchases, even for the rewards themselves, it’s when you start to carryover a balance to the following month is when you start to get hit with interest, not to mention going into debt. If you’re able to pay off the full statement balance by the due date, you can keep your credit utilization low and get the most of your credit score.
Leave Accounts Open
If you have had debt trouble in the past or are just looking to get rid of your credit card, you may want to think twice about closing out the account. By closing you are taking away any available credit you have, so if you have debt on other cards you are reducing your credit limit and could decrease your score in the meantime. If you are not looking to use the card any longer, your best bet could be to cut up the card so you cannot use it, but to keep the account open.