Now that the holiday spending is over, you probably are planning on going into financial hibernation so you can catch up on bills. After all, the credit card statements are probably starting to roll in now and may be in for a shock at just how much you spent on gifts this year. While it was the giving season, now it’s time to reflect on the upcoming year and look to make the best financial moves that you can, one of those being to ensure that your credit score continues to rise, even though the added balance.
Make On-Time Payments
Whether your credit has been less than perfect, or you have been on the right track, always making on-time payments are important in maintaining not only good standing with creditors, but also that your credit score does not take a significant hit by forgetting to make a payment. While being a day late will not hurt you other than incurring a late fee or maybe an interest rate spike, it’s when you go thirty days late is when you will notice the almost immediate negative impact. As busy as life can get, it’s important to pay bills on time, even scheduling in advance if you have to.
Leave Yourself Available Credit
If you are someone who checks your score every month, you may notice when this recent statement came in, your credit score takes a bit of a dip. That’s because, the higher your balance gets and the closer to your available credit you reach, the lower your credit score will go. While it’s not necessarily bad to use a credit card for purchases, but if you carryover a balance each month you will not only start paying interest that grows as the balance increases, but your lower credit score could cost you the difference in a lower interest rate on a mortgage, auto loan, or credit card.
Review Your Credit Report
If you are not aware of what your credit score looks like, now is the time to check, as it’s included on the monthly credit card statement so you can see month over month. What you may not be doing, however, is reviewing your full credit report to ensure that all information and accounts are up to date and accurate. You can receive a free copy of your credit report once a year from the major credit bureaus, so it’s at least worth looking into, especially with all of the fraud these days, whether it’s someone taking your account info, or getting in through a breach in the retailer’s system.
While taking out a credit application will not make a significant difference, but the more you continue to apply for will drop your credit score, and you could be giving lenders the impression that you are looking to charge up all of your available credit. It may seem like common sense, but be sure to research rates and pros vs. cons before you decide to proceed with a credit application.