This post is sponsored by Alamo Associates. All opinions expressed are our own.

Another year is coming to an end, and we are thinking a lot about the past year, and things that we could have done differently. While we don’t want to ponder on anything, or wonder what things would have been like had we went a different route, we would like to start planning for a better new year. With that being said, we are going to take a little time to discuss credit card debt today.

Alamo Associates: Helping With Credit Card Debt

What are credit cards, and why do we even bother with them?

Definition of credit cards according to Wikipedia: “A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder’s promise to the card issuer to pay them for the amounts plus the other agreed charges. The card issuer (usually a bank) creates a revolving account and grants a line of credit to the cardholder, from which the cardholder can borrow money for payment to a merchant or as a cash advance.”

What Is a Credit Score?

Your credit score is a three digit number that lenders will use to determine your risk of paying back what you have borrowed. If you have a low credit score, then you are higher risk and may not be able to get a loan or credit card. The higher your score is, the less risk you are to lenders, and the more likely they will be to give you a loan or a credit card. You can learn more about credit scores at Equifax.

Now that you know what credit cards are and what a credit score is, you can see the importance of using the credit card properly, in order to keep your credit score in good order. If you fail to make your payments on time, or you max out your credit cards, your credit score will be affected and it can affect your chances of borrowing in the future.

Ways to Improve Your Credit Score

1. Pay Bills On Time- If you are in the habit of making late payments, or not paying your bills on time, this will be to the credit bureau, and it does affect your credit. You don’t want to fall behind on bills, especially if you want to keep your credit score in good standing.
2. Keep credit cards and loans low. Creditors will look at your debt to income ratio when they are considering lending to you. If you have a lot of debt compared to the amount of income you have coming in, then they will see you as a high risk and may not want to allow you to borrow from them. Think about it like this…Would you lend money to a friend that you know had already borrowed money from all of your other friends, but had yet to pay any of them back? Probably not. That is how the lenders view things when looking at your credit score. Keep your balances low, and make payments in a timely manner.
3. Do not open a lot of different accounts. It is never a good idea to open a lot of different accounts for the sake of having them. If you have credit cards that you are not using, it can actually hurt your credit. It is best to hold a card that is going to be used and paid off in a timely manner, than to have 10 different cards and only be using one.
4. Do not open and close accounts. If you have credit cards opened and you close them quickly thinking that this will help your credit, it can sometimes hurt your credit. The lender will look at how much credit others are allowing you to hold. If you close these accounts, it may increase your credit utilization ratio. Going hand in hand with this is opening new accounts. Every time someone inquires into your credit the people checking your credit (such as the lender you are applying with) can see this. You do not want too may people inquiring about your credit at once because that can become a red flag, so don’t apply for too many cards at one time. This could hurt your credit score, instead of helping it.
5. Check credit online. You will want to check in on your credit score from time to time, making sure that there are no fraudulent charges being made by strangers using cards in your name. This can really hurt your credit, however keeping track and on top of things can help you to fight the fraudulent charges and file disputes if this happens to you.

While it may sound like credit cards are a bad thing, they really aren’t when used the right way. Having a credit card and paying off the monthly balance every month can help you bring up and keep a higher credit score. You should take great pride in a higher credit score, as it can help you to achieve many financial goals in your future. With a higher credit score you can purchase vehicles, a house, obtain better credit card offers and interest rates and so much more. You can learn more about ways to improve your credit score at myFICO.

Alamo Associates Helps You Get Back On Your Feet

There are companies such as Alamo Associates that will help people suffering from credit card debt. Contacting a company like this can be a pliable option for someone that is serious about getting their credit back in order and helping themselves to become financially stable again. Don’t let your finances and bad decisions control your life. Take the necessary steps to getting your credit in order and gaining that financial freedom- knowing that you can now proudly say that you have a good credit score and are working towards a better future. There is always time to invest into your future. Start today, by making some simple changes and helping yourself.

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