Focus on Raising Your Credit Score in 2018

There’s plenty of talk about a resolution to lose weight, but what about your finances?  How about your credit score?  Those seems to be targets that are more important than probably losing ten pounds for beach season.  Instead of spending your days asking what a aaa membership cost, how about taking a hard look at your credit score and look for ways to improve it, so you can take advantage of the best interest rates on the market when looking for a mortgage, loan, or a new credit card.

Review Your Credit Report

There is so much fraud these days that you never know who has your information at this point, so it’s a good idea to check to make sure that your credit report is up to date, and more importantly, accurate.  The three major credit bureaus will provide a free copy of your credit report once a year so you can review, although it will not have your score.  You can see your credit score month over month on your credit card statement, which now lists the score each month so you can make sure it’s trending in the right direction.

Never Miss a Payment Due Date

One of the most influential pieces of your credit score is history.  Now paying past the due date will not hit your credit, although you could be in for a late fee or interest rate spike.   Any late payments that are thirty days late and more will severely damage your score so it’s always important to make sure they are paid by the due date, if not earlier.  The more you continue with on-time payment you should see your score rise as you are establishing a positive credit history, showing lenders that you are a responsible borrower.

Eliminate Debt

Just as important to your score as payment history is the amount of debt you carry, in other words, the credit utilization between the balances and the overall credit limits that you have.  If you have, say, multiple cards but only have a balance on one, your score should be improved instead of maxing out one card.  The more you pay down your debt to the overall credit limit the more you will continue to see your score improve, and not only that, less interest payments that you will need to make once you get rid of your debt and are in the clear going forward.

Consolidate Balances

Whether it is taking out a new credit card offer for 0% APR to transfer balances, or even taking out a debt consolidation loan, by weighing the pros and cons being having the debts paid off sooner than making minimum payments vs, cost, it may make sense to combine your balances and consolidate debt so that you can get a handle and finally be debt free.  Once debt is paid off you can focus on putting your recently freed up money to more important areas such as building an emergency fund and saving for your future.

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