September 27th, 2010
5 Fall Financial To-Dos For Your Credit Health
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It’s almost October and Fall is underway, and with that, your favorite TV show is back, Halloween candy on sale, and you’re about to spend significant money on holiday travel and gifts. During the holidays, personal finance health tends to drop off consumers’ radar as credit card debt climbs and credit scores drop. NOW is the time to start watching your credit health.
In the spirit of some of our favorite websites’ own to-do lists, notably Kiplinger’s Fall Financial To-Do List and LearnVest’s Your Financial To-Dos, we’re checking off your Fall Financial To-Dos specifically for your credit, so you can move into the new year with a better credit score.
- Check your credit report. There’s nothing like starting on a clean slate, but you can’t erase your past bad credit behavior. However, you can fix any credit history errors on your credit report. Credit bureaus report inaccuracies more often than you think, and marks from old settlements, foreclosures, or closed account are sometimes left after the expiration term of 7-10 years. Dispute every mistakes; cleaning up your credit report can add dozens of points to your credit score.
- Add to your available credit. Increasing your available credit is an effective way to boost credit because it lowers your credit utilization rate, one of the biggest factors of your score. You can get a new credit card, or, if you have good credit, negotiate with your current issuer to extend your credit limit. Upping your credit limit on your existing cards won’t cost you a hard inquiry like applying for a new credit card will, plus it will come in handy for the heavy spending of the holiday season.
- Prepare your credit for shopping. Unless you’re going cold turkey on spending this holiday season, chances are you’ll be charging much on credit, so prepare your credit now. Some key things to watch for: Don’t buy everything on credit just to rack up rewards points, don’t get a retail card, and watch your credit limit use. Check out more of our Shopping Dos and Don’ts.
- Prepping to borrow credit? Watch your inquiries. It’s the time of year that consumers purchase the latest car models, plan to move or buy homes, and set lofty financial goals for the new year like opening a business . Many of these big financial moves—getting a car loan, business loan, mortgage, personal loan, renting an apartment—require a hard inquiry, which dings your credit score a few points. If you’re planning to borrow credit soon, minimize inquiries as much as possible or it’ll add up in damage points.
- Early New Year’s Resolution—one positive financial move for your credit score. You don’t need to guess your way to better credit. Go to our Credit Simulator (totally free, by the way) and see which financial actions will specifically help your credit score. How many points will opening a new credit card add? Maybe paying off your debt will finally help you reach the 750 mark. Commit to one of these actions to positively affect your credit by the end of this year. Start working on it now as a goal to start 2011 off with healthier credit than you have now.
Bottom line: It’s almost the season for giving AND spending, so start taking precautions for your credit score now.