“ Aside from paying a charge for late payment , not paying your bill within 30 days will cause credit reporting agencies to be informed and such record will be filed for at least 7 years ,” according to Katie Ross , manager of education and development at the American Consumer Credit Counseling in Auburndale , Massachusetts .
Paying promptly , however , is not sufficient . To enhance your financial well-being , you must speed up your debt payments by paying above the required minimum dues .
Paying only the minimum results in paying more interest , particularly if the Federal Reserve raises interest rates several times , as predictions for 2017 seem to suggest .
The best strategy for such an ominous event is to slowly increase your payments within the year .
“ Welcome the new year as your challenge to set a strict debt control by raising your monthly payments ,” suggests Bruce McClary , vice president of public relations and external affairs at the National Foundation for Credit Counseling . “ Accelerating debt payment can bring hundreds of dollars or even more in savings , based on the size of the debt and the fee structure .”
Review your accounts and credit reports
Regularly review your credit accounts for any possible credit card scams and to find out your total expenses and debts , Battison states . Report right away to your credit card company any charges that you did not make .
Use your smartphone to set notices to alert you when your credit card is used . This will tell you whenever an unauthorized charge has been made .
Also check your credit reports regularly for any signs of fraud in your accounts . Is there a credit account you have not opened ? If so , someone could have opened one by using your personal information .
What to do ? You can stop criminals from using your name and your personal information by freezing your credit .
Avoid these 3 things to safeguard your good credit
1 . Do not take out a cash advance . With interest rates on cash advances from 10 to 15 %, you end up paying higher rates compared to ordinary expenses , Ross says . There are also fees for processing a cash advance . Although a cash advance may not adversely affect your credit , piling up debts just might . Use your savings for any additional cash needs .
2 . Avoid closing a credit card account . Doing so might impact on your credit utilization ratio , which is the amount of credit that has been extended to you against the amount you utilize . Closing a credit card account decreases the credit that you can access , adversely affecting your credit score . “ Another way closing a credit card account can damage your credit is by losing the corresponding track record of the card . Remember that credit works much like trust ,” says Steve Repak , a Charlotte , North Carolina-based CFP professional as well as author of “ 6-Week Money Challenge .” “ Credit takes a long time to gain but only a moment to lose . It is more preferable for your credit score to cut up a card from being used than closing the account ouright .”