The list of things that you're supposed to check regularly can feel endless–everything from air filters for your house to physicals for your family. But when was the last time you checked in with your credit score? A credit score is a number that lenders review to decide whether or not you're a good credit risk for items such as mortgages and auto loans.
Follow these tips to help improve your credit score.
1. Set up automatic payments.
Much of your credit score is based on payment history–and late payments can do serious damage. If covering the full bill each month isn't possible, set up auto pay for the minimum amount due, then make additional payments as you're able.
2. Avoid carrying a balance.
Carrying a balance can occur when you're not paying your credit card bill in full each month, meaning you're getting charged interest fees on past purchases. Contrary to popular belief, paying in full can boost your credit score and history. If you have to carry a balance (we get it–emergencies happen) always pay at least the minimum due, or more if you can.
3. Keep track of spending.
Review your monthly statements when they arrive in the mail–or, better yet, log onto your online accounts weekly–to make sure nothing looks amiss. This also gives you the chance to note spending patterns and see areas where you can cut back if you've struggled to pay your bills.
4. Don't purchase large items you can't afford now.
If you don't have the money set aside for that flat-screen TV, paying for it with credit will cost you more in the long run. Think of your credit card as an extension of your checking account, and save up the cash for large purchases before you swipe. Bonus: If you're able to pay off large purchases immediately, you'll keep your credit utilization (your debt-to-credit-limit ratio) in check–and your credit score will thank you.
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