|by Brooke Kaelin|
2009 is going to be a great year! Some people are for New Year’s Resolutions, some people are against them. Whatever your stance on beginning-of-the-year resolutions, the credit card practices below will all see you through 2009 and beyond.
Resolution #1: Pay off your credit cards
Carrying a balance on your credit cards really is the wrong way to use credit – even though it’s very common. When you carry a balance and pay interest to the credit card companies, you lose most of the major benefits of having a credit card to begin with.
If you want to pay off your credit cards this year, make sure you try calling your credit card companies first. Customer service, or collection’s managers can remove fees and interest off of your card for you if you ask. It never hurts to have your balances reduced before you pay them off!
Resolution #2: Check Your Credit Report and Dispute Bad Information
It’s time consuming, and more than a little boring to sift through your credit files and check for inaccuracies. But! It is well worth it. Any negative information that you can remove from your credit reports will raise your credit score. In the long run, having a higher credit score will help you the next time you need to apply for credit – whether that’s another credit card, a home, or a vehicle.
When you are ready to take this step check out our step-by-step walk through. It makes the process of disputing items on your credit report easy.
Resolution #3: Check Your Credit Score
This step is not free, but it is essential. Once you have paid your credit card balances off, and challenged the bad information on your credit report, then it is time to check your credit score and see where you stand. Whether your score is high or low, you need to know where you stand because it will affect your actions in the future.
If your credit score is 700 or below just keep making your payments on time, and keep the balances on your credit cards low throughout the year. By the end of 2009, you will see your score skyrocket!
The easiest way to check your credit score is to go to MyFico.com
Resolution #4: Understand Your Credit Score
The more you know about how your credit score is computed, the easier it will be for you to raise your score and keep it high. There are many factors that impact your credit score. How much debt you have, how often you make your payments on time, which types of credit you use (home loan, car loan, credit cards, student loans), as well as how much money you charge on your credit cards each month and how old your credit accounts are. It can be a lot to take in, and even harder to understand how to raise your credit score.
For an explanation of exactly how your FICO score is computed, and how to predictably raise your credit score check out these articles:
Resolution #5: Take Advantage of Reward and Cash Back Credit Cards
If your credit score is 700 or above, and you do not already have cash back or reward credit cards, you can consider applying for them. As long as you do not carry a balance on your credit cards then you can take advantage of the many, many rewards programs out there.
Certain credit cards offer rewards for travelers (like air miles), may offer cash back on your purchases – which is like getting a very small perpetual discount on everything you . Yet other programs offer free gas credits, or money for college. Whatever your needs or favorite things are chances are there is a reward credit card out there that will benefit you. Remember though, that reward credit cards typically have a slightly higher interest rate than some other credit cards. So, if you carry a balance on them at all you are going to negate any rewards that you would have earned.
For more information on the types of reward credit cards out there, you can read our reviews of the different cards.
That pretty much wraps up the safe and suggested methods of managing credit. If you do these things your credit score will go up, and remain high. You will also be getting the full advantage of having and using credit through your reward cards.
How about you? Do you have any New Year’s Resolutions? Leave Us A Comment Below!