Did you damage your credit rating this holiday season? If so, then its time to get it back on track. Millions of Americans are suffering from reduced credit scores due to overspending and a penchant for holiday credit cards. Although it might be tempting to let that balance linger for a month or two while you pay it off, a low credit score can affect the interest rates on any loans you apply for, and it can even hurt your ability to get financing for a car or home. This year, instead of letting your credit score mire until the spring, start rebuilding it by following these easy steps.
1) Stop spending and start repaying. No matter how you look at them, credit card balances are bad. This is pretty common knowledge, but according to Consumer Reports were bad at learning, because 6% of Americans are still paying off the balances they racked up during Christmas 2010. This year, instead of making your holiday hangover even worse, do your credit rating a favor and start paying off your debts aggressively before spending any money on luxury items in 2012. The faster you pay off your debt the better off you are, and theres no quicker way to get back in the black than with a focused, flat-out attack.
2) Keep your cards open. Although you might be tempted to cancel the credit cards that drove you into debt this season, closing your accounts is actually counterproductive if you want to build a good credit score especially if youve got a balance open. What you really need to do is keep your chin up and pay off your cards, starting with the smallest one first. This should go without saying, but dont apply for any new cards until your balances have been cleared.
3) Inspect your statements thoroughly. Sometimes youre not the one to blame for a low credit score. During the holiday spending frenzy, its not uncommon for card companies to accidentally charge you for a purchase you never made or to overcharge you for one that you did. Thats why its important to keep a keen eye on all of your balance statements. Review every single charge to make sure theyre accurate, and dont be afraid to call and complain if you discover any inconsistencies.
4) Keep up on all of your other payments. While paying off your credit card balance is the best way to fix a bad credit score, you cant forget about your other debts. Credit monitoring agencies factor in your mortgage and other active loans in addition to your credit history when determining your total score. Therefore, you need to make sure that you arent simply filling one bucket by emptying another when paying off your debts. Your mortgage should always be your highest priority, and then whats left of your paycheck can be used to pay off your balance.
You are the only person who can improve your credit score. Dont wait until its too late to start rebuilding the rating you damaged over the holidays. Use these expert tips to get your score back on the fast track to excellent today.