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Choosing a loan or card, carrying a balance, and protecting the credit score that sets your rates. Borrow on better terms and pay off what you owe faster.
An accurate late payment can still come off your credit report if the lender that reported it agrees to remove it. If it’s your only late payment and the account is current, ask the lender in a short goodwill letter. Some lenders refuse, but a yes removes a mark that can stay seven years.
Earning too much for grants is no reason to skip the FAFSA. The same form is your application for federal Direct Unsubsidized Loans, which have no income test, and some state and college merit scholarships require it too. File it every year, whatever your income.
Trading in a car you owe more on than it’s worth doesn’t erase the gap. Roll it into the next loan and you pay interest on a car you no longer own. Keep the one you have until you owe less than it’s worth, and extra payments toward the loan get you there sooner.
Before you ask your card issuer for a higher credit limit, find out whether the request triggers a hard inquiry. Some issuers review requests with a soft inquiry that never affects your score, while others run a hard one. Read the request’s terms or call your issuer, and back out if the answer is hard, unless your balances run high.
Before you visit a dealership, get a car loan pre-approval from a bank or credit union. A dealer who arranges your financing can mark up the rate the lender approved and keep part of the difference. Walk in with a pre-approval, and the dealer has a rate to beat.
If you carry a credit card balance, your statement has a Minimum Payment Warning box. Besides the cost of paying only the minimum, it lists the monthly payment that clears the balance in three years, unless your minimum already does. Set autopay to that amount and keep it fixed as the balance falls.
When a debt collector contacts you, don’t pay or agree that the debt is yours. Read the validation notice, then dispute the debt in writing before the end date it lists. A dispute in that window makes the collector stop collecting until it sends you verification.
A credit card cash advance is the costliest way to use your card. You pay a fee up front, usually 5%, and interest builds from day one, often at a higher rate than purchases. Money orders and some person-to-person transfers can count too, so keep your credit card out of anything that works like cash.
Your car loan’s rate reflects the credit score you had the day you signed. If your score has climbed into a higher range since then, or the dealer arranged your financing, get refinance quotes and take one that beats your rate. Keep the new term no longer than the months you have left.
If a layoff, medical bill, or pay cut means you can’t make a loan or credit card payment, call your lender before the payment is late and ask for its hardship team. You don’t need to be behind to ask, and calling first can keep a late payment off your credit report.
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