Save Money by Improving Your Credit Score

The beginning of the month is usually when we all take a deep breath and pay our dreaded bills. It’s an unpleasant yet necessary ritual that without we would get swamped by collection agencies. So, as we sit with pen and paper, or computer and keyboard, this month, I thought we could all re-evaluate our payment plans and be reminded of methods to improve our credit scores.

The biggest culprit in bad credit is out-of-control credit card debt with the average American carrying around approximately $8,000 worth of it. First things first, stop using plastic! Then, starting with the highest interest rate card, pay off monthly as much as you can while you continue to pay the minimum payments on the rest. When determining your FICO credit score, debt balances in comparison to credit lines are heavily factored, so strive towards maintaining low balances. An obvious, yet easily overlooked tip is to always pay your bills on time. Just one slip and it can detrimentally affect your credit score.

As you’re taking steps to improve your credit, remember that it’s like losing weight – it won’t happen overnight. Keep in mind the long-term benefits to maintain motivation. Those with higher credit scores are offered the best rates on all major types of loans which will save you money. For more credit-improving tips, visit CNNMoney and check out this interactive online debt planner if you want to visualize your monthly payments and goals.