While you could be seeking out class action rebates in order to make extra money to make ends meet, others would pick maybe another job in their space time, or at least sell items around the house, whether that be on online or even donating for tax write-off, when it comes to looking to get extra money around the house, all possibilities should be explored, especially reducing expenses. While you can cut out going out to eat or even cutting the cable bill, but what about the interest rate on your home mortgage, personal loan, insurance rate, or credit card? Your credit score is the driving factor to determine your rate, with the best credit scores being able to take advantage of the best rates on the market, so it’s important to keep striving for the highest score you can.
Not Looking at Your Credit Report
You never know who may have your information these days so it’s a good idea to pull your credit report, even if it’s once a year, to ensure all accounts are accurate and up to date. The major credit bureaus offer a free copy of your credit report once a year, although it will not have the score, but you can read your full report to ensure that no one else has your information from skimming at the gas pump, catching a glimpse of your card while you’re paying a bill, or even having your information compromised by the store you shop at.
One of the worst things you can do for your credit is to miss a payment. Now I’m not talking missing a day or two. While missing even a day may cost you a late fee or worse an interest rate spike, it’s when you get to thirty days late is when it’s reported to your credit report and it can take up to seven years to come off, so while you can slowly build your score back up over that, that late will haunt you for years to come and probably be asked about from lenders every time.
Racking Up Debt
While it may not be quite the blemish on your credit as a late payment, but that doesn’t mean that the amount of debt that you’re carrying doesn’t affect your score just as much. In fact, the credit utilization factors into your score as much as payment history, so the closer your debt balance is compared to the available credit will lower your credit score as your utilization increases. The best you can do is to pay off the statement balance by the due date and keep the balance as low as you can, even if you’re using the card regularly.
Too Many Applications
It may only be a few points here and then when you fill out an application for a credit pull, but enough of them and it will not only lower your score but you may have some explaining to do to lenders when they ask you why all of the credit inquiries on your report. It could give the impression that you’re looking to charge up debt, even if that isn’t the case. Having your credit being pulled should be saved for improvement in your finances, such as a lower mortgage rate or a rewards credit card.
Closing Zero Balance Accounts
Debt can be a scary thing, one that if you continue to fall deeper and deeper, the weight on your shoulders continues to grow until you feel backed against a financial wall. If you are able to get out of debt it should be a huge sign of relief, a great accomplishment, and you may think about closing the account so you don’t go down that path again. While I wouldn’t blame you, you might want to cut up the card so you can’t use it anymore, but keep the account open. That way you aren’t losing the available credit and risk your score going down, especially if you have balances on other cards and losing this available credit would increase your credit utilization.
Not Monitoring Credit Score
Your credit score is not included in the free copy of your credit report each year but that doesn’t mean you have to be in the dark on what your score is. If you take a look at your monthly credit card statements they will not include your credit score, so you can see exactly where you are and make sure you continue to trend in the right direction every month.