So what does it mean when someone talks about a “relationship” with credit cards?   Is it the same thing that’s meant when dieters talk about a relationship with food?   A love/hate relationship?   Yes!!   You love the moment you make your purchase but hate the moment you receive the credit card statement.   And then you tell yourself you will never do it again.  Just like dieters love the moment they’re eating but hate the moment they get on the scale; and they tell themselves they’ll never eat again.

It is so important to understand your relationship with your credit cards because of the huge impact credit cards have on your credit score and credit reports.   If you have the wrong relationship with your credit cards, you can cause terrible damage to your credit score and it shows up in your credit reports.

Wrong Relationship With Your Credit Cards

1) You carry endless balances on them.

2) You skip payments.

3) You pay late.

4) You carry too many active credit cards.

5) You have past due accounts.

Ways To Improve Credit Score

1) Cut Your Credit Card Balances.

It will more difficult for you to  improve your credit score if you carry credit card balances.   Debt is one of the factors used to determine your credit score.  If you keep charging more than you can afford to pay off every month, you will not improve your credit score, you will just keep digging yourself deeper and deeper into debt and your credit score will keep dropping.

2) Always Make Payments|Even If It’s Just The Minimum.

You will not improve your credit score if you skip making your payments.  Payment history is another factor used by the financial industry to determine your credit score; it’s actually one of the highest weighted factors.   Adjust your spending habits; if you can’t afford it, don’t buy it.

3) Make It A Habit To Pay On Time.

You should pay all of your bills on time; your credit cards, mortgage, auto loans, student loans, utility bills.  Just get yourself into the habit of paying your bills on time…even if you just pay the minimum amount due. Again, your payment history is one of the highest weighted factors creditors use in determining your credit score and credit reports.    You look better paying a minimum due vs paying late.

Credit cards4) Two Credit Cards Is Plenty

Available credit compared to the amount of credit you use is another important factor in your credit scores and credit reports.    If you have too many active credit cards, you may be more tempted to use them all; which would alter your credit ratio and lower your credit score.

5) Make Good On Past Dues

The financial industry looks upon past dues as a very big negative in regards to credit scores and credit reports.  The financial industry considers past dues as irresponsible.  So if you have any past due accounts, make it a number one priority to pay up.

Credit scores and credit reports are here to stay as a financial tool used to judge you as a consumer.   Learn your credit score and work with it to improve it.    The first way to improve your credit score is to order your free credit score once a year.   You can order a free credit score from each of the 3 national credit reporting agencies every year….and it’s free.