3 Ways to Boost Your Credit Score in 2018

PostHolidayCreditImprovement

All the holiday excitement is over and it’s time to face your post-holiday credit card bills. If you stayed within your budget, you shouldn’t have difficulty paying off your bills. However, if you went a little crazy with December cheer, now is the time to take corrective action, prioritize your finances, and boost your credit score.

As you get your finances back in shape, you’re ultimately helping out your credit—and for a multitude of reasons, it’s important to have a good credit score. Good credit grants you better loan approval, lower interest rates, higher spending limits, negotiating power, and more rewards. Your credit score also impacts the ability to obtain necessities like a home, a car, and other lifestyle needs.

So here’s how to start boosting your credit score in 2018.

  1. Pay All Your Bills on Time

If you’re expecting hefty post-holiday bills, the best way to improve your credit score is to simply make timely payments. Making all of your payments on time is crucial to a great credit score and positive credit history. Your payment history has a huge effect on your credit score.

Set calendar reminders or alerts on your phone to make sure you pay your bills and pay them on time. Unpaid bills are a red flag and may indicate to the lender that you’re an unreliable borrower. It’s also important to tackle balances with the highest utilization and interest rates.

  1. Consider a Lifestyle Change

If you find yourself strapped for cash, there are a few things you can do.

  • Pay at least double the minimum on each payment. If you can, and if there’s no prepayment penalty, doubling down on payments each month will help you tackle the balance quicker.
  • Rework your budget. Evaluate your budget and cut out unnecessary expenses that are eating up your income. Then you can start allocating that money toward getting out of debt. For example, forgo your daily specialty drink at your local coffee shop and bring a lunch from home instead of buying lunch at work. Setting a strict budget will allow you to free up cash and focus on paying down your debt.
  • Pick up a side hustle. If you can, apply for a part-time job or do some extra freelance work to build up your funds.
  • Don’t apply for new cards or loans. For now, stay away from new credit card and loan applications, even if you’re planning to use the extra credit to pay off your debts. Also, avoid using any credit cards you’re currently paying off. 
  1. Check Your Credit Report

About once or twice a year, you should check your credit report for mistakes. Maybe you forgot to pay a bill, or maybe you’re a victim of identity theft. If you don’t check your report for these and other problems, chances are you may miss them and they can harm your score tremendously—which in turn would bring you great financial hardship.

According to the Federal Trade Commission, about 5% of consumers have credit errors large enough to increase costs of insurance or some financial products. When you have bad credit with a low credit score, it may take some time to build it back up. Check your history so you can address these problems right away.

When you do check your credit report, make sure you get reports from all three bureaus (Experian, Equifax, and Transunion) to get the clearest picture of your credit, since some creditors only report to one or two. You can check two of your credit scores for free at Credit.com

 

Image: iStock

The post 3 Ways to Boost Your Credit Score in 2018 appeared first on Credit.com.

5 Possible Benefits of Changing Your Bills’ Due Dates

benefits-of-changing-your-bills'-due-dates

Paying bills is a tedious necessity, and for many, it’s also an ongoing source of stress. According to the 8th annual Billing Household Study from Fiserv, a financial services provider, 35% of consumers paid at least one bill late in the past 12 months, and 65% also paid a late fee.

So, why are these people struggling to meet their billing deadlines? Common reasons include forgetfulness, lack of funds and personal life obligations. If any of these reasons sound familiar, it might be a good idea to consider how your billing due dates factor into the equation. These are five ways requesting a timeline shift from your providers could could really benefit you.

1. Saving Money

Late fees are the immediate consequence of missed payments, but the financial woes don’t stop there. Frequent missteps can lead to increased interest rates on your revolving accounts (like credit cards), driving up your balances and making it more difficult to get out of debt. Paying your bills on time can help you avoid these issues and ultimately save money.

2. Promoting Credit Health

Payment history is the greatest factor considered in credit scoring, and you can’t afford to ignore the effects of late payments. According to Equifax — one of the three major credit bureaus in the U.S. — even a 30-day late payment can damage your credit significantly. In contrast, paying your bills on time can help give you a strong payment history and benefit your credit. Not only that, but keeping your debt level low in relation to your overall credit limit (also known as credit utilization) can benefit your credit scores. Experts recommend keeping your debt below at least 30% (ideally 10%) of your total available credit, which can be hard to do if you’re tacking on late fees. (You can see how your credit is currently fairing by viewing two of your credit scores for free, updated every 14 days, on Credit.com.)

3. Removing Memory from the Equation

According to a 2013 Citigroup survey, 61% of people miss bill payments due to forgetfulness. Coordinating your payments to fall on the same days each month — the 1st and 15th for example — gives you a better chance of remembering your financial commitments. If you still fear memory troubles, it might be a good idea to sign up for bill auto-pay to remove human error from the equation. Most credit and service providers offer this option for free, but you’ll want to check with your individual provider to be sure.

4. Streamlining the Payment Process

Fiserv’s survey found that consumers pay bills using a variety of methods and doing so could contribute to making it hard to keep track of all your bills and their due dates. According to Fiserv:

  • Consumers used six different payment methods per month in 2015, up from 2.9 methods in 2014.
  • A reported 21 million households changed their bill payment method on a monthly basis in 2015, a 40% increase from the previous year.
  • Of those who participated in the study, 21% still receive all paper bills, while 54% use a mixture of paper and online/mobile options — 25% consider themselves paperless consumers.

By changing your billing due dates, you may also feel inspired to commit to a consistent method of payment. Doing so could help you track spending and streamline your monthly finances, helping you keep those bills paid on time (and those credit scores in great shape).

5. Preserving Credit Repair

This may not apply to everyone, but to those it does, it’s a big one. Recovering from past credit damage is an extreme challenge, but that’s especially true if you don’t change the behaviors that contributed to the downfall of your scores. In fact, preserving your scores could be more difficult as it improves. Typically, a single late payment made a few years ago won’t still be hurting your credit today, as long as you rebounded and have made consistently timely payments. Of course, on the other hand, a recent late payment could drop your scores.

How to Change Due Dates

Changing your billing due dates can usually be done with a simple request, which can be done online, on the phone phone or in person. Although credit and service providers aren’t legally required to make this type of shift, explaining your reasons and commitment to timely payments could work in your favor.

Image: shironosov

The post 5 Possible Benefits of Changing Your Bills’ Due Dates appeared first on Credit.com.