3 Ways Your Credit Can Be Ruined – Zombie Bills, Life Insurance and Reward Cards

Photo Credit: www.creditcardscanada.ca

The top three pieces of financial advice, according to The Week, involve the effects on your credit when switching addresses, how to avoid life insurance mistakes and when to use rewards cards responsibly. Read on to get a better understanding of how valuable these financial actions are on your credit and how you can avoid a financial disaster.

Zombie bills can ruin your credit
Don’t let moving wreck your credit, said Gerri Detweiler at Credit.com. When you’re switching addresses, it’s important to make sure final or unexpected bills don’t go unnoticed. If accounts still have a balance and remain unpaid, they could go into collection and ding your credit score. To avoid that scenario, send a letter to any accounts you need to update or close and ask for a confirmation number. Remember to “check your balances the month you move, the month after you move, and six months after you move” to make sure no wayward bills or balances are lingering on your report. Monitor your credit, too, since “any unexpected drop in the score could indicate a problem.”

Life insurance mistakes to avoid
Common life insurance gaffes can cost you a bundle, said Hank Coleman at Daily Finance. For one, don’t “leave savings on the table by blindly renewing” your policies. If your insurance automatically renews, give your carrier a call to try to “negotiate a discount.” And remember to “re-examine your coverage” every few years, especially after any significant life events, such as the birth of a child, marriage, divorce, or major purchases, like a new home. Finally, remember that there’s safety in numbers. “If you want a good deal on products and services, life insurance included, you need to get multiple quotes.” That includes premiums, but also benefits. “Read all of the clauses in your policy” and “understand exactly which perils” the insurance will cover. “While price of the premiums may be the same among many policies, the terms and clauses may be the differentiating factor.”

Using rewards cards responsibly
If you use credit cards to rack up rewards, beware, said Kristin Wong at Lifehacker. Many cards offer “great incentive programs,” but the rewards game can be “like playing with fire,” especially if you use the cards to pay for everyday expenses. Opening a new card can shave a few points off your credit score, but so can closing one, since it reduces your debt-to-income ratio. A better approach “is to leave the card open and simply not use it after you’ve earned whatever sign-up bonus it offers.” For heavy rewards cards users, the best way to protect your score is to pay the cards in full every month and never pay interest. Stick to your budget and never “use rewards as an excuse or reason to spend more.”

Again, these are the top three pieces of financial advice, courtesy of The Week, but that’s not all you need to be concerned about with regards to your credit. Visit more blogs on credit and financial advice on the UnlockYourWealthRadio.com site.

Now, we want to hear from you! Would like to share your opinion or make a comment on the Unlock Your Wealth Radio Show? If so, then please leave your comment or questions in the space provided below and share this article with your friends and family on Facebook and Twitter. Your comments or question could be chosen as our featured Money Question Monday and a phone call by financial expert Heather Wagenhals could dial your way to be live on the Unlock Your Wealth Radio Show.

Source: The Week

Leave a Reply

Your email address will not be published. Required fields are marked *