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Given what is going on in our economy, it is so very important to make sure your credit is solid.

I am very concerned that many of you may have unpaid credit card balances, or balances that are growing. There is now more than $1 trillion in consumer credit card debt. WalletHub estimates that the average debt per household is now more than $10,000.

That’s alarming enough, but it gets worse. Over the past year, the Federal Reserve has taken steps to curb inflation which has resulted in the interest charged on credit cards to rise. The average is now more than 22%. Five years ago the average was around 15%. That was already way too high, but now it’s 22%.

If there are any wants showing up on your credit card statement, that has got to stop right now. Do you hear me? There is no excuse or reason to pay 22% interest for something that is not an essential need.

And if you have been using your credit cards more, you should check how that is impacting your credit score and your credit report. Your credit score plays a large role in whether you can get a loan and the interest rate you are charged on loans and credit cards. Because of Federal Reserve policy, all borrowing rates are higher today than they have been in the past decade. A solid credit score will help you qualify for the best deals.

Credit Scores

Chances are good that your bank offers a free credit score report. If you aren’t being pummeled with emails or texts about this, log in and search if there is a free credit score offer. The standard credit score ranges from 350 to 850. If your score is at least 720 (740 is even better) you’re in very good shape. Lower than that, you are likely paying more for financial products.

One of the best ways to boost your credit score is to make all payments on time. No excuses. And reduce your spending. A large part of your credit score is tied to the total balance on all your cards. The lower that total sum is, the better your credit score.

Credit Reports

If it’s been a while since you have checked your credit reports, the time has never been better. At annualcreditreport.com you can now get a free credit report from each of the three major credit bureaus: Equifax, Experian, and Transunion. Check your report for any mistakes, such as a loan you paid off that is still showing up. Or an account you don’t recognize. To state the obvious, identity theft remains a huge danger for consumers. When you get your report, it will include instructions on how to flag any mistakes or identity theft.

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    Category: credit cards