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Doing What Matters: Improving Your Credit Scores



Doing What Matters: Improving Your Credit Scores

One thing that always matter is the overall look of our credit histories. This is what determines whether or not we qualify for a mortgage, if we’re approved for a credit card and even if we get a job. Start 2012 off with a renewed commitment to your financial health and while you’re at it, check out a few of the great offers we’re sure to see more of as the new year rolls in.

What Counts

Millions of Americans have credit histories that are less than ideal – and it wasn’t always that way. In fact, in the past three years, first time bankruptcies have increased and those filing are often in their late 40s and early 50s. This trend was indicative of the recession, the job losses and even the foreclosures that set the wheels into motion that nearly crippled the U.S. economy.

Now, though, with all signs pointing to a better new year, those same Americans are wondering what to do to get their credit reports back to a more favorable state. Fortunately, those same tools we’ve used in the past are still the best weapons in our financial arsenals.

30%

For those with credit card debt that isn’t paid off each month, your best bet is to not exceed 30% of your available credit. Anything more than that, and you’re risking a drop in your credit scores – especially if several of your credit cards exceed that magical number. Keep those numbers in check and your balances won’t affect the bottom line in terms of what your scores are.

Budget, Please

It’s all in the budget. A realistic approach to your finances can go a long way in not only maintaining, but improving your credit scores. The new year is the perfect time to rededicate yourself to saving money while paying down credit card balances.

We Recommend

All of the experts pointed to the Citi Dividend World MasterCard, which is offering new card members a $100 cash back bonus if they spend $500 in the first three months after being approved. The offer also includes extra cash back deals that might are ideal for back to school, vacation and even next year’s holiday sales, including 5% cash back for purchases at department stores, clothing boutiques, electronics stores and toy stores. One note: there’s a $300 limit on reward earnings annually. There’s no annual fee, and provided you budget properly, this could be an invaluable tool as you set about in focusing on your credit scores. Be sure to check out the CitiBank website, too, as there are many tools that will help you as you continue to improve your credit history.

Payment Reminders

Setting up payment reminders is another easy-to-incorporate plan. Doesn’t matter how vigilant you are in your budgeting efforts, it’s unrealistic to believe a payment due date won’t slip by unnoticed. If nothing else, it’s an ideal reminder each month of what your goals are. Use your email calendar to set those reminders up or your smart phone likely has no shortage of available apps designed to serve as an assistant.

We Suggest

Blue Cash Preferred American Express offers a cashback bonus of $150 after spending $1,000 within the first three months. We like this one because of the 6% saved on every day things like that trip to the grocery store and for department store shopping, you’ll see a 3% savings.

Keep in mind, too, that these cash back categories are permanent, so there’s no worries about keeping track of your changing categories. There’s also no need to sign up for various promotions every three months. If it’s flexibility you’re looking for (and who’s not?), this includes a six- or 12-month 0% introductory APR. One note: this will vary depending on your history and unlike the Citi offer, this credit card has a $75 annual fee. Still, the perks might be worth it to you, including the online budgeting tools and payment reminders you can set straight from the American Express website.

The bottom line is for anyone looking to improve their credit scores, it’s often a slow dance – and you’re not always leading it. Still, patience and determination has done far more than just taught tolerance. You can easily find yourself in a much better financial place this time next year if you make up your mind the only way to go is up.

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