Sounds like a fun post, right?!?! YEAH! This one isn't going to go too deep, so don't freak on me. Jon and I are in debt. You know, like about 90% of the other people we know. We have "use anywhere" credit cards, store credit cards, and everybody's favorite: student loans. Over the past few months we have been a little tight, so I have been making a whole lot of "minimum payments." These help chisel away at the debt, but it's a very slow, painful process. I have been watching my credit score nose dive as we had to put other things on these cards, even though I always (and I do mean always) pay them on time and at least the minimum amount. --I use Credit Karma to track only one of my scores (of the 3), but it seems to have all of my activity on it.-- Jon did a side job recently that paid him in one lump sum and I knew exactly what I wanted to do with part of it. So we actually completely paid off one "use anywhere" card (Even though it wasn't a huge amount) and you will not believe what this did to my credit score...it went up FIFTY-TWO POINTS. 52. It went from "fair" to "good." Whoa. I was not expecting that much of a jump, but I was ecstatic! Jon was pretty impressed, too.
For the record, Credit Karma said it liked the fact that our total credit card utilization went down by 6%. I didn't realize what a huge factor that was. We also learned that they don't like maxed our credit cards, either. I don't remember if that is technically 90 or 95% of your credit limit, but it's one of those...just a heads up. They also don't like multiple "hard" inquiries (unlike the "soft" inquiries they use to obtain your score) in a small time span.
Anyway, I wanted to remind everybody about the boring side of Christmas and life and let you know what a simple action can do for you in the long run. If you get any Christmas bonuses, you might think about taking a bigger bite out of that mountain of debt to help you out in the long run. Merry early Christmas!
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