We always look to cutting everyday expenses that we overspend on in order to have a little extra money left at the end of the month, but we often forget that credit decides how much your most expenses bill cost you. Even when utilizing spending thrifts like Groupon Coupons, it’s best not ignore your credit score. If you have great credit you could be taking advantage of the best interest rates that are on the market, and if your credit is poor, you could be paying top dollar, or not even get approved at all. Mortgages, credit cards, loans, car lease, and even insurance can be driven by your credit score, so you want to make sure you are at the top of your credit score game.
Get to Know Your Credit Report
If you are like most, reading your credit report is something that is not done on a regular basis and may only have looked at it if you have had trouble getting approved for a loan in the past. With the amount of fraud these days with identify theft it would be smart to at least review your report once a year just to make sure everything is accurate. You are allowed to view your report for free once a year from each of the three major credit bureaus, so you can contact them directly to get a copy.
Pay Off Debt
A huge factor in your credit score has to do with the amount of debt against your total credit availability, so in order to bring your score up you will need to pay off debt. Not only for credit score purposes, while important, but you want to avoid paying any debt interest that you can so that all of your money goes towards necessary spending and saving. No matter the outstanding balance, put together a payment plan so you can get out of debt completely, and avoid paying only the minimum payment at all costs as that hardly even covers the interest and you will never chip away at the balance.
Keep Zero Balance Accounts Open
If you had any sort of balance at one time and have successfully paid it off, that is a great accomplishment and you should be proud of yourself, so proud in fact that your first reaction is to now close the account you just paid off so you never have to use that card again. That actually would be a mistake, and the best thing you can do is to keep the account open but just cut up the card so you do not use it. Closing the account would reduce your available credit and may raise score significantly if you have other outstanding debt.
Only Apply When Necessary
These days there is so much competition when it comes to credit card offers that you may apply to see if it was legit or not, but in actuality you should only apply to the one you for sure what, and that can be said about anything when it comes to pulling credit, only if you are absolutely planning to go through the approval process. Otherwise, getting credit pulls can reduce your score with its inquiries, and may even show lenders that you are applying for too many things and may plan a string of charges.
Watch Out for Co-Signing
You may have a family member who had a troubled credit past that needs your assistance with signing for a loan, or even a child that does not have a credit history yet and needs your help to get it going. While there is nothing wrong with co-signing, it is just worth noting that you are just as liable, so make sure whoever is getting the loan is trustworthy, because any late payments and it will fall on you as well and may ruin a quality score that you have worked hard over many years to achieve.
Strive for Credit Score Greatness
Now that you are taking notice of your credit report, the score should be a main focus going forward. While the annual free credit report does not come with a score (will have an extra charge for that), you are now able to see your credit card quite easily. Most credit card statement now include your credit score in there, so you are able to monitor month over month and see if there are any major changes. It can take years to get an excellent credit score, but keep at it and if you do, you will be paying far less over the long run.