Though it sounds counterintuitive , avoiding credit card use can hurt your credit score because you won ’ t have any credit history or the correct credit mix when you want to obtain a loan for a vehicle or a home .
payment , or at worst that you could be a victim of identity theft . But you wouldn ’ t know any of this unless you are regularly monitoring your credit score . Luckily , there are several ways to obtain and monitor your credit score for free
. Annualcreditreport . com provides consumers with a free copy of your credit report every 12 months from each credit reporting company : Equifax
® , Experian
® and TransUnion
® . Federal law allows free credit reports , so do not be fooled by websites that want to charge a fee .
Transferring balances . Consolidating your credit card balances to one card with 0 % interest rate can help you save money and pay down your debt faster if you pay it off within the terms . However , if you transfer balances to a new card each year , you will not only lower your credit score , but your credit utilization will also increase if you are still using the old credit card . Also , most balance transfer offers come with a fee of 3 percent or 5 percent 1 to process the transactions .
to myFICO . com , “ FICO
® Scores consider the combination of credit cards , retail accounts , installment loans , finance company accounts and mortgage loans ” to the tune of 10 percent of your score .
You have control over your credit score and how it changes . Practice these tips to help your credit score remain stable :
• Pay your bills on time or early each month .
• Keep your debt at a minimum .
• Don ’ t open or close too many credit cards .
Remember , simple mistakes can damage your credit score and impact your overall financial health .
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