Tonight I'm going to give you a few ways of improving your credit scores. We'll see next week why the scores matter so much. If your credit score isn't as high as you like, try these ideas:
1. Never, ever make a late payment. Credit card companies don't actually care if you pay the balance off in full, but they care if the payment is late. (I care if the card isn't paid off in full, but this column isn't about me!) If you can set an automatic minimum payment coming from your bank account, you won't forget to pay the bills.
2. In fact, set every payment you can to be made automatically out of your bank account. Be aware that in spite of credit reform legislation, you may have a very short window between when you receive your bill and when payment is due. If the payments are autodeducted, you don't have to keep up with them as much.
3. After you have paid off a credit card, don't cancel it. Part of your credit score is your debt to potential credit ratio. Cancelling a card lowers your potential credit.
4. Make more than the minimum payments on bills whenever possible, as often, the minimum payments may not even cover the interest expense. This causes you to lower that debt to credit ratio even further.
5. Don't apply for too many cards. A rumor is that if it looks like you're desperate for credit, the credit ratings lower your score. I'm not sure this is true, but I do know that every time you apply for credit (even just to get that in-store discount), they run a credit check on you. An excessive number of credit checks lowers your credit score.
Come back on Tuesday, and we'll look at the impact of credit scores an areas of your life you may not believe! Have a great holiday weekend.
Be prosperous!
Peggy
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