Maintaining an excellent credit score is essential when qualifying for student and home loans. Car dealerships will run a credit check to ensure you’ll pay off your shiny new vehicle before they let you drive it away. Even apartment complex owners will check your credit for assurance that you’ll pay your rent each month.
So how do you keep your credit in line after the holidays? Here are several tips and tricks to live by.
Pay Off Christmas Bills
It’s no surprise that the holidays often wrack up quite a lot of debt on credit cards. While there might be some buyers remorse at the turn of the New Year, you’re unfortunately stuck with those bills. The critical thing here is to make sure you don’t ignore them!
Paying your bills, especially the monthly fee for your credit cards, is essential to keeping your credit score looking good. One missed payment for thirty days can drop your credit score as much as 90-110 points.
Continue paying the minimum on that shiny new TV, car, or remodeling project you couldn’t wait to complete, and you’ll keep your credit score where it should be.
Keep Low Credit Card Balances
This might sound difficult to do after the holiday’s pass, but it’s one of the best things you can do to keep your credit score in line. The more of the credit line you use for credit cards, the lower your credit score will be.
Stated by an Austin credit repair expert, the general rule is that you should only use 30% of your credit limit. So, if you have a $10,000 credit limit, the max amount of credit you should carry at any one time is $3,000. While this may not always be practical, it’s a tried and true principle to live by.
Limit Credit Cards
If you already have four credit cards, don’t apply for another unless it’s necessary. The more credit lines you open and loans you take out, the riskier you will appear.
Even if you are actively paying them all off, it sends a message that your finances might be unstable because you’re applying for so many lines of credit. Excess credit cards can cause your credit score to drop because of this principle.
Periodically Check Your Report
You should check your credit report and if it doesn’t match up to your habits, or reflects a deduction for something you didn’t do, it’s essential to inquire into it. Why?
If you are a victim of identity theft, oddities in your credit report could be present. There are also times when things are misreported. For either case, it’s essential to follow up and pursue changes that need to be made.
Never leave mistakes on your report longer than you have to.
What Is Your Next Step?
Now that you know some necessary steps to take for keeping your credit in line, which will you do first? Will you make it your 2020 resolution to keep paying your bills on time? Are you going to pay off a card or drastically reduce the existing balance?
Perhaps you’ll do some research into your credit number. Whichever step you take, you won’t go wrong!