TIP: Two ways to make the biggest impact on your credit score are 1) make your payments on time and 2) keep your balances low.
I recently paid down a balance on one of my credit cards with some savings. It was a tough choice because I know I'm supposed to keep 3 months of expenses in savings (gee, if it only it had been that much), but it seemed useless to have money in savings earning so little when I'm paying so much for credit cards. Anyway, I'll be curious to see how it impacts my credit score. It also reduced my minimum payment, so now I'll continue to make the higher payment and more of my money will go toward paying off the principal balance, lowering my finance charges. (That's called Snowballing, by the way. I should blog about that debt reduction strategy one of these days...)
For more ways to improve your credit score, see this article on our website. It's part of our Balance Financial Fitness program.
Thursday, April 2, 2009
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I think this sounds like a great idea. Did your interest rates increase? My mom called because they increased her interest rate without a reason. I wasn’t sure what to tell her to do. I thought if she stopped using that card they would have to keep her previous purchases at the lower interest rates. She said that did not work and she was afraid that if she cancelled the card it would hurt her credit. Just curious.
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