Finances at Four: Getting a Grip on Your Credit in 2021
Matt Frankel is a certified financial planner and credit expert with The Ascent.
They found last year Americans had an average revolving credit card balance of $6,271.
He says there are five things you can do to get a grip on your credit in 2021:
- Get a free credit report. Normally, you’re entitled to one free copy of your credit report from each major bureau — Experian, Equifax, and TransUnion — once a year. But through April of 2021, you can access your report for free every week.
- Set a budget to improve payment history. Being on time sends the message to lenders that you’re trustworthy and responsible, so it’s important to work on improving your payment history — it carries the most weight of the various factors that go into calculating your credit score.
- Lower credit utilization. A ratio of 30% or less is helpful to your credit score, whereas a higher ratio will harm it. That’s why it’s important to keep tabs on your existing credit card balances to make sure you’re not going overboard.
- Check your credit score. Some credit cards provide a free FICO score — the industry standard.
- Use a balance transfer card to wipe out interest until 2022. Balance transfer credit cards are a great way to save money while you pay off debt. This type of credit card offers a low introductory APR — many even start with a 0% APR.
The four’s Xavier Hershovitz spoke with Frankel to get more in-depth on his tips. Watch the video above to see the interview.