The content is accurate at the time of publication and is subject to change.
Lately you may have found that you owe a lot of money and you just do not seem to getting around to fixing those outstanding dues on your credit card. You are not alone. 30 million Americans are facing the same problem as you. Getting a loan or a credit card with an interest rate that is acceptable or with no annual fee can seem near impossible if you already have poor credit scores. You can however sort out the mess and get back on the wagon.
The better your credit scores, the higher are your chances to get a home loan or a good interest rate on your mortgage. Your insurance company will also give you more favorable deals. Having good credit scores is the path to a successful and tension free life for sure!
To be working on your credit score and improving it you need to first know what it is. Unless you do, you can't opt to improve it or make it better. There are credit bureaus such as Experian, Trans-union and Equifax which will send you a credit report yearly. You can also access your records online should you want to. Once you know your scores you can see what needs to be done to keep it going well.
Paying off your mortgage, student loans and other loans can be positive on your credit scores, but not as much as paying off the outstanding amount on your credit card. When your available credit limit and the amount you spend are different then it looks good for your credit scores. Sure you have a high credit limit and would like to splurge, but that balance will add on if you cannot close it each month. A maxed out credit card will reflect poorly on your credit scores.
If you limit how much you charge to say 30% every month you will be on the right path, don't overspend, and keep track of your transactions and balances monthly so you can maintain it by paying off what you owe every month. You can check online through internet banking and receive your credit statements online through email as well. There are also ways to set reminders for your monthly payments if you have more than one card with different due dates. All this will keep you prompt in sorting out your various bills.
Getting rid of your old cards is a good idea. Having older credit history is good, but many people stop using their old cards once they get new cards with attractive rewards and coupons. If you are not using your old card anymore, then get rid of it. Close the balance on it, close the account and be done with it. Having it open with no activity really does not have any effect on your credit history.
Credit cards can make life much easier if used with discretion. When you get additional spending power, be sure to make your purchases carefully or you will end up in big trouble.
