Tag Archives: revolving credit

8 Ways to Boost Your Credit Score in the New Year

8 Ways to boost your credit score in 2018Whether you are planning to buy a home in 2018, or are considering refinancing your mortgage, you’ll want to make sure your credit is in tip top shape to get the best interest rate possible. Here are 8 ways to boost your credit score in the New Year to help you reach your financial goals:

  1. Pay your installment loans like car loans and student loans on time every month. Even paying them a day late can wreak havoc on your credit. Pay on time, every time. If you have to be late, call your lender before the payment is due to explain and to see if there are any options to pay later that won’t affect your credit.
  2. Do not close old credit cards. You haven’t used that department store credit card in awhile, but you have a $1,000 credit limit. Closing that card will actually reduce the amount of total credit you have available which can count against you. Keep it open. Just don’t use it, particularly if it carries a high interest rate.
  3. If you don’t have credit, establish it. Not having credit is a problem because you haven’t shown a lender, credit card company or other creditor how you’d handle credit. Apply for a small department store card, a secured credit card, a secured loan or a combination of these accounts to begin establishing credit. Start by charging a small amount and paying it off at the end of each month. Credit history will be based on how timely you pay but also how long you’ve had credit, so this strategy will take time but it is worth it.
  4. It’s OK to pay off loans early. Paying your loans on time is critical, but if you are in a position to make payments early, to add extra money to the principal portion of the payment or pay it off early, you will help your credit.
  5. Review your credit score for free annually. Correct any obvious errors and follow up on items that may not be your, the sooner, the better.
  6. Pay off collection accounts as soon as possible. Have an old dentist bill from three years ago you didn’t pay? This can stay on your credit report for up to seven years, even longer if the original creditor “sells” the debt to another credit agency for collection.
  7. Don’t open a bunch of new accounts at once to increase your amount of available credit. This can lower your average account age. Instead, open accounts as you need them and use them responsibly.
  8. Keep your credit balances low on revolving accounts. Having a lot of debt negatively impacts your credit.

 

Optimize Your Credit Score in the New Year

One of my friends, and preferred providers, Lee Anderson of Reclaim Credit Consultants, has some great suggestions for reclaiming your credit in the New Year. Read Lee’s top five tips for optimizing your credit score on his blog. For example, did you know that you should pay more than your minimum balance on revolving credit accounts every month? It helps you pay down debt faster, reduces your interest charges and improves your available credit limit to debt ratio.

Great advice, Lee, and ideal for those considering buying or refinancing a home in 2012!

 

10 Tips for Protecting Your Credit

If you want to own a home someday or refinance the one you are currently in, it is important that you protect your credit. This is particularly true now that lenders are tightening credit guidelines. Here are 10 tips to help you protect your credit:

  1. Pay your bills on time.
  2. Keep only a few credit cards open at a time, keep the balance below 35% and use your credit responsibly.
  3. Do not close credit cards, even if you have a $0 balance.
  4. Use your credit wisely. Don’t open accounts you don’t need or that have a high rate of interest.
  5. Be cautious when reviewing online credit card offers or sent by mail. The fine print could be hazardous to your credit!
  6. Pay down or pay off your credit card balances, but don’t close the accounts.
  7. Review your accounts to ensure accurate reporting and that credit limits on revolving accounts are correct.
  8. Review your credit report to see if duplicate accounts appear. If so, have them reviewed.
  9. Go over your credit report at least twice a year to see if there are errors or omissions which could impact your credit.
  10. Need help deciphering or repairing your credit? Contact my friend Lee Anderson with Reclaim Credit Consultants. He can help!