Come on and admit it, both men and women want to receive something on Valentine’s Day, and both can feel the pressure to spend serious money to make their partners feel loved. The ultimate test of intimacy is financial disclosure between you and your partner. Here are some credit tips to improving your credit score before you go out and splurge on that romantic dinner and gifts this Valentine’s Day…
Your Credit Limits vs. How Much You Owe
Divide the total combined balances on your credit cards by your total credit limits. This is your credit utilisation ratio, and the lower it is, the better. One way to pump up your credit score in the month of love is to decrease that percentage. Pay off as much of those outstanding balances as possible. Payments made by the account’s statement date — not necessarily its due date — should reflect on your score as soon as the creditor reports the activity.
Make Timely Payments
If you don’t have a credit card yet, now’s the time to apply. If you don’t yet have a credit history and find it hard to get approved, a secured card can get you started. Make regular and timely payments to begin building a good credit history and credit score. If you already have credit cards but your payment history is dragging down your score, dedicate the new year to meticulously making every payment on time. If you make more than minimum payments to whittle down your credit utilisation ratio in the process, that’s even better.
Check for Inaccuracies on Your Credit Report
Get a copy of your credit report, and go over it with a fine-toothed comb. You’re entitled to one free credit report every year. A creditor may have reported that you made a payment late when you didn’t. Look for accounts that you never took out or don’t recognise. You can dispute this kind of inaccurate information, and getting it removed from your credit report should improve your score.
Don’t Close Accounts
Resist closing accounts, even if they have zero balances because you haven’t used the card in forever. The longevity of your credit history affects your score — the longer the better. Even if an older credit card is collecting dust in your wallet, keeping the account open works in your favour. Don’t close an account that has a balance because the balance will still be there while the credit limit goes away, and this will affect your credit utilisation ratio.
Article by Garnet Jensen, senior director at TransUnion.