1/19/17 by Carmine Barbetta (FB)
Discussing credit can often be a taxing, vexing situation in that some individuals aren’t really sure what their habits, when done collectively, can do to an overall credit score.
The debate rolls on with talk of late payments, credit card balances and paying off debt or closing cards as the summation of being savvy with your credit score or not really sure what can hurt it, either.
As the discussions continues, you should be forewarned that some credit score missteps are universally panned as being bad all around, with no reason to defend these particular decisions.
Paying late often is the easiest way to drop your credit score without trying very hard. The real hard part of this to fathom are the individuals who have the money to pay but simply forget. With all the tech support we have from smart phones to laptops and Outlook calendars, you’d be hard pressed to have a good excuse for why you miss a payment that financially you can make but still don’t.
Missing payments, on the surface, will tell lenders that not only are they unsure you’ll pay on time but wonder quietly if those late payments eventually will turn into no payments whatsoever.
In a perfect world, credit cards wouldn’t be dogging you as far as hurting your credit score, either. But there are two things two do when paying attention to those plastic cards that reside on opposite ends of the financial spectrum.
For starters, you shouldn’t randomly close credit cards that have a zero balance. Those actually help you overall with your score and watching it stay put or grow somewhat as you pay off your other higher balance cards. Having zero balance out of a $2,000 limit, for example, helps your overall credit utilization, versus having nothing but cards with balances on them.
In addition, for the cards that have a balance on them, do what you can to make sure that balance isn’t butting up against the total credit available, again talking specifically about credit cards. This not only hurts your credit score but puts a clamp on how much you’re permitted to borrow moving forward, which is particularly troubling if you need a car or house.
Credit isn’t something we can avoid but certainly is an element of money and saving it that can be controlled correctly when you’re not only aware of your situation but working diligently toward making it better.