credit cardsAre your credit habits ready for a new year resolution? If you’re like many Americans, you may be able to improve your credit health and your finances by changing a few of your credit practices. Here are five bad credit behaviors that should be broken in 2019.

  1. Carrying large credit card balances

Maintaining a large credit card balance can not only be expensive, it can harm your credit score. To avoid paying interest charges, you should strive to pay off your credit card statement balances completely by each due date. So you don’t harm your credit score, you should try to keep your combined balance across all your cards below 30% of your combined credit limits.

  1. Opening or cancelling credit unnecessarily

Sometimes, you need a new line of credit or loan, and sometimes, it’s right to close one out. But each action comes with benefits and consequences, including an impact on your credit score. Having a variety of credit accounts open helps your credit scores in the long run, but opening new accounts can harm your score a bit in the short term, and closing old accounts can weaken your scores. Click here for advice on when to cancel a credit card.

  1. Missing payments or making them late

Mistakes can happen, financial challenges can arise and bill payments can be late or missed. Unfortunately, failing to make timely payments can cost you in fees or damage to your credit scores. While everyone’s challenges are different, creating a budget, setting reminders or alerts for due dates, exploring bill autopay options and maintaining a sufficient bank balance can all help ensure your payments are made on time.

  1. Ignoring your spending statements

Reviewing your monthly credit card, debit card and bank account statements is few people’s idea of fun, but it’s an important step for catching accidental or fraudulent charges. Set aside a time each month to check your statements – or budgeting services like YNAB or – to make sure everything is in order with your accounts. This could save you from a major expense or damage to your credit score.

  1. Neglecting your credit reports

The contents of your credit reports determine your credit score and impact what kind of credit is available to you. If mistakes find their way into your reports, they can sabotage your credit, potentially costing you money and hindering plans like a home purchase. Click here to learn how to check your credit reports once a year for free.

Savvy use of credit can save you money and accelerate your progress toward your financial goals. By ditching any of these bad habits you may have, you can help ensure that credit will be a tool rather than a burden to you in 2019.

  • By: Draper and Kramer Mortgage Corp.
  • In: Finance, Tips
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