Florida consumers used their credit cards a lot during the holiday season of 2017. And, accordingly, their credit scores may not be at their highest moving into the New Year. According to a recent report for FICO, American credit card debt increased, on average, by about 10% from October 2017 through December 2017. Unfortunately, if credit card users in Florida bumped their credit card balances up to levels that reflect more than 30% of their spending limits, their credit scores probably dropped. This is because your credit utilization ratio accounts for about 30% of your credit score. However, the New Year brings an opportunity for Florida consumers to get credit card balances down and their credit scores back on track.
Ways for Florida Consumers to Pay Down Credit Card Balances and Increase their Credit Scores
The same FICO survey reveals that about 57% of consumers in Florida have seen their FICO scores drop since October. In fact, one in five of these consumers lost 20 or more credit score points. Luckily, unless they’ve missed payments, most consumers can quickly re-inflate their credit scores by paying down high credit card balances. Here are a few tips on how to do this as quickly and efficiently as possible.
Restructure your budget, and pick a payment strategy.
First, take a good look at your budget, and cut out any unnecessary expenses. Next, put the saved money toward your credit card balances, according to one of two strategies. You can use the “snowball method,” which involves paying off your smallest balances first. Or, you can implement the “avalanche method,” where you pay off the credit cards with the highest interest rates. Either way works as long as you stick to your plan and see it through until the end.
Apply for a balance transfer credit card.
Normally, this plan only works for Florida consumers with good credit scores. This is because you must qualify for a credit card with a low interest rate or a 0% APR (normally an introductory rate). Once you have the new card, transfer your balances over, and work to pay off the combined balances. Of course, you can save money on interest charges by using this approach. Yet, if you have an introductory APR, make sure that you pay off the balance before the promotional period ends.
Use your tax refund to pay down (or pay off) balances.
It may not be the most exciting way to spend your tax refund. But putting your entire refund toward high credit card balances should improve your credit score. Also, Florida consumers should file their taxes early this year. After the Equifax data breach, all U.S. consumers are at a higher risk for tax fraud. So, file your tax returns before identity thieves have the opportunity to file a fraudulent return in your name, and illegally claim your refund.
Take out a lower-interest personal loan.
To take advantage of this strategy, consumers in Florida should qualify for personal loans that come with lower interest rates than their credit cards. Once you get approved for a loan with the right APR, use it to pay down or pay off your credit card balances. Then, pay off the loan as quickly as possible. For many consumers, this plan comes with a bonus feature that involves their credit mix. Your “credit mix” refers to the types of accounts on your credit reports. It makes up about 10% of your credit score. Ideally, you should have both revolving accounts (credit cards) and installment loans in your credit history and on your credit reports. Therefore, if you didn’t have any open loans before, adding a personal loan should give your credit score an extra boost.
How Florida Consumers Can Protect their Credit Scores by Regularly Checking their Credit Reports
While Florida consumers work to improve their credit scores during the New Year, they should remember to check their credit reports at least once every 12 months. Under the Fair and Accurate Credit Transactions Act (FACTA), this is how often they may request a free copy of their credit report from each of the three major credit bureaus. Of course, you should check all three, and you can get all three from www.annualcreditreport.com. This is the only federally authorized website that offers free credit reports from TransUnion, Equifax, and Experian.
Once you have access to your credit reports, check all of them thoroughly for signs of identity theft. Unfortunately, the holiday season is a busy time for identity thieves too. If you find fraudulent transactions or bogus accounts, file a police report immediately. Then, contact Credit Repair Lawyers of America in Florida for the easiest way to recover your credit reports after identity theft.
While reviewing their credit reports, consumers in Florida may also spot mistakes and errors made by creditors and the credit bureaus. Many of these inaccuracies harm credit scores, but you can get them removed quickly and with zero hassle by calling Credit Repair Lawyers of America in Florida.
When you contact our firm, an experienced credit attorney will do whatever it takes to fix your credit issues, and get you clean credit reports – for free.
How to Get Free, Legal Credit Repair in Florida
Don’t let errors or identity theft damage on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in cases that are settled. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (813) 940-7255 or sending him a message through our contact page.
For more information about Free Credit Repair, please visit https://creditrepairlawyersam.com/florida/credit-repair/. Or, to learn more about Free Credit Repair After Identity Theft, check out https://creditrepairlawyersam.com/florida/fix-identity-theft/.