Spring isn’t just for decluttering your closets — it’s the perfect time to freshen up your credit too. A clean, well-maintained credit report can open doors to better interest rates, loan approvals and greater financial peace of mind. Your credit report contains details about your credit history, including open and closed accounts, credit limits and any negative marks such as late payments or collections. Reviewing it regularly helps ensure accuracy and enables you to address any potential red flags to lenders.
Check Your Credit Report for Errors
Just as dust and clutter can slowly accumulate in your home, errors can sneak onto your credit report over time. Start by pulling your free credit report from each of the three credit reporting agencies at AnnualCreditReport.com. Review the reports carefully for mistakes such as incorrect account balances, outdated personal information, inaccurate account status or accounts you don’t recognize. If you spot an error, dispute it with the credit bureau to prevent it from dragging down your score.
Tackle High-interest Debt First to Save on Interest Charges
If you’re carrying a balance on multiple credit cards or loans, prioritize paying off the ones with the highest interest rates first. This strategy, often called the avalanche method, helps reduce interest payments over time and frees up more money to pay down other debts. If a high balance is weighing down your credit utilization ratio — the percentage of your available credit that you’re using — paying it down could potentially give your credit score a boost.
Lower Your Credit Utilization Ratio
Speaking of credit utilization, keeping this ratio low is key to maintaining a strong credit score. Ideally, you should aim to use no more than 30% of your available credit. If your balances are creeping up, consider making extra payments or asking for a credit limit increase — as long as you don’t use it to spend more.
Automate Your Payments
Missing a payment can hurt your credit score and lead to costly late fees. To avoid this, set up automated payments for at least the minimum amount due each month. This simple step can ensure you never miss a due date and help keep your credit history in good standing. You can also set up payment reminders or split larger payments into biweekly installments to make them more manageable.
A Fresh Start for Your Finances
A little credit spring cleaning today can make a big difference for your financial future. By reviewing your credit report, tackling debt, managing your credit utilization and automating payments, you can safeguard your credit and improve your financial health. So, while you’re dusting off your shelves and organizing your closet, take a few moments to tidy up your finances — it’s one spring-cleaning task that truly pays off!
Source
https://www.cnbc.com/select/what-to-look-for-when-you-review-your-credit-report/
https://www.experian.com/blogs/ask-experian/does-credit-utilization-include-all-credit-cards/