Your credit rating and score are an important part of your financial life.Â Keeping both healthy, or repairing them if theyâ€™re not, is vitally important for future endeavors like opening new accounts, purchasing anew car or new home, and even getting student loans for your children. A large part of your credit score hinges on your Credit Card history and balances.Â In this 3 Part series weâ€™re going to look at the best Tips and ideas that you can use to keep your credit card history healthy and/or repair it if itâ€™s a bit of a mess.
The best way to start anything if from the beginning with a clear idea of where you are.Â If you donâ€™t know where you are youâ€™ll never know when youâ€™ve gotten where you want to be.Â With credit cards the best way to know where you are is to get your credit reports from the Big 3 credit reporting agencies, TransUnion, Equifax and Experian. They are by law supposed to give you 1 free report per year and you can obtain yours by surfing to AnnualCreditReport.com.
If you know that your credit report and score arenâ€™t that good, and you can wait to get a new credit card, do that until you can perform some repair work on your credit. Taking care of inaccurate info, false reports and blatant mistakes is vital to your score and needs to be done before any attempt is made to get a new card. Late payments and high balances need to be stopped and lowered, respectively, before you apply for a new credit line.
Once youâ€™ve gotten things in order first congratulate yourself on a job well done. Your next task is to figure out what benefits that youâ€™d like your new credit card to have before you start applying for a card. If you travel a lot, for example, you may want a card that gives you lots of frequent flyer perks like points for hotels stays and flights.Â Gas rewards are valuable if you are on the road all the time and cash-back rewards for you shopaholics might be a great idea. There are other perks, to be sure, like no balance transfer fees or low late fee penalties so figure out what you want before you apply so that you get the card and perks you want on the 1st try.
Speaking of perks youâ€™ll want to compare them and decide which are really the best for you.Â The simple fact is that many so-called perks come at a price.Â Frequent flyer miles, for example, coupled with a card that has a high annual fee and high penalties for late payments might not be a good idea for you if you donâ€™t travel all that frequently but occasionally pay late. (Try your best not to do that by the way. Itâ€™s not good.)
These should get you started. Join us for Part 2 coming soon.