Posted on 2015-01-08 02:20:27
Did the holidays take a toll on your credit score? If you are nodding Yes, there is hope. While you can’t expect an instant credit score fix, these 3 tips can help your lousy holiday credit score shine again. Pay Down Credit Card Balances. If at all possible, pay more than the minimum balance due. Not only will you pay less interest and lower your debt faster, this also helps lower your credit utilization ratio—the amount you owe compared to your available credit. That ratio is an important factor used to calculate your credit score. If you used your credit cards for convenience or to earn rewards, don’t wait for those January statements to pay down the balances. Most credit card issuers will report your statement closing balance to the credit bureaus. If you can, pay down the balances so you are using no more than thirty percent of your available credit when your statement closes.
Make On Time Payments. If you really got in over your head and you can’t pay your credit card balances in full, be sure to make at least the minimum payment on time. Late payments can drag your credit score down in a hurry. And surprisingly, a single late payment will hurt a good credit score more than it will hurt a poor credit score. Become Intimate with Your Credit Report. There is too much at stake to not know what your credit report is saying about you. Credit report errors do happen, and some credit report errors can have a serious impact on your credit score. Since new information is continually added to your credit report, a credit monitoring service is an easy and effective way to ensure you stay on top of the information in your credit report. What Not To Do • Don’t resort to a payday loan to get your out of a post-holiday bind. The interest on those loans is astronomical and will almost certainly make things worse. • Be careful about transferring balances to an introductory interest-free credit card. Transfer fees often negate the interest savings. Once the introductory period is over, you may have a higher interest rate than the account you started with. And if that balance isn’t paid in full during the introductory period, the entire transfer amount may become subject to interest.