Ten months in the books. Let's discuss credit card debt.
All of your bills are being paid on time and you’ve even managed to start an emergency fund. Now is the perfect time to take another look at credit card debt.
When it comes to your credit, it’s important to know where you stand. What is your credit rating? Excellent credit? Poor credit? The importance of having a good credit score can’t be understated. A swing of ten to twenty points can be the difference in qualifying for that low APR refinance and ultimately saving yourself thousands of dollars over several years. Here are some quick tips to keep up on your credit:
Request a copy of your credit score report – and make sure it is correct.
Your credit report illustrates your credit performance, and it needs to be accurate so that you can apply for other loans – such as a mortgage. Everyone is entitled to receive a free copy of his or her credit report annually from each of the three credit reporting agencies, but you must go through the FTC’s website at www.annualcreditreport.com
Set up automatic bill pay.
Payment history makes up roughly 35 percent of your credit score depending on the model used. The longer you pay your bills on time, the better your score. Avoid missed payments by setting as many of your bills to automatic pay as possible. Minimum automatic payments are a great way to make sure you are covered even if you forget to pay the full balance that month.
Keep balances low on credit cards and ‘revolving credit.’
Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. You often can increase your scores by limiting your charges to 30 percent or less of a card's limit. For example, if your credit limit is $1000, the best practice is to keep the card to under $300 in purchases per billing cycle.
Apply for and open new credit accounts only as needed.
Keep this in mind the next time a retailer offers you 10 percent off if you open an account. However, if you need a new line of credit, don’t jump at the first appealing offer; compare rates and fees offered through mail solicitation, on the Internet or at your local bank.
And remember, talk to a credit counselor if you’re in trouble. Our certified, non-profit counseling agents that have been in contact with you can help you manage your debt and won’t hurt your credit score. If you haven't spoken to us yet or heard from us, then please reach out to us at email@example.com and let us know your availability.
What steps are you taking to improve your credit score?
This month, the team at MMI will be reaching out to you via phone to go over best practices and help answer any questions. If you miss their call, please call 877-349-4447 to speak with a counselor.