We spend a lot of time talking about how to improve your credit, but what do you do if your credit does improve?
Well, after you’re finished doing a happy dance and bragging to all of your friends, I have a suggestion…
Start taking back your cash!
That’s right! You could potentially add a lot more cash flow to your monthly budget by simply reclaiming all of the penalties your less-than-perfect credit forced you to pay.
Here are five quick things you should do if your credit score goes up:
1. Get Better Rates on Your Credit Cards.
This should be your first stop. Not only are credit cards notorious for charging very high interest rates for less than perfect credit, they rarely lower interest rates unless you ask. However, if your credit has improved and you ask them to, they are often very willing to lower those higher rates if they think you will stop using their card.
If you’re carrying a balance on your credit card(s), this simple request could save you hundreds of dollars every month. Even cooler, if you do pay off your balance(s) every month, you can ask for better rewards – it’s still a cash advantage!
If your credit score is better today, pick up the phone and call your credit card(s).
2. Get Better Rates on Your Insurance.
Just like credit card companies, insurance companies use your credit report to determine your rates – or what you pay in premiums every month. Studies show that the difference could be 20 to 30 percent between good credit and bad credit customers.
That could easily be an extra $20 to $30 or more for most people, just by lowering your car insurance rate. But, don’t stop there. Check your home, renters and life policies too.
If your current company doesn’t want to help, simply shop for better insurance.
3. Ask For Your Utility Deposits Back.
This is one I think a lot of people forget about. Utilities are essentially a credit account. They give you service and you pay for it at the end of the month. Utility companies have to trust you to pay them for services they give you up front – and they don’t do that blindly, they check your credit.
[Free Resource: Check your free credit report and score]If your credit was dinged up, there’s a good chance that they charged you a security deposit. Often that’s a significant amount of money that’s locked up until you cancel your service. But, it doesn’t have to be that way. You can often call and negotiate a return on your deposit if you can show that others like you – good credit customers – are not being charged a deposit.
Also, don’t forget about the cable company. They probably socked you with a hefty deposit for that cable box or DVR. Try getting that cash back into your own bank account.
4. Get a Better Cell Phone Plan
Another biggie, cell phone plans come in all shapes and sizes. For bad credit customers that usually means an over-sized monthly bill for the very basics in calling and texting services. You might even have to pre-pay for your service.
If your credit score has recently flipped from bad to good, get on that lousy cell phone, dial up your cell phone company and ask to be treated to a better phone and lower rates.
5. Lower Your Mortgage Rate or Payment.
Your mortgage or rent is always a huge opportunity to reclaim lost cash, especially when your credit improves. In this market, with historically low rates, you might get a double effect because the market has lowered all rates.
If you have a mortgage or wanted to buy a home and couldn’t qualify, a better credit score is the best time to call your trusted mortgage expert.
If you’re renting, you may still be able to get a better deal. Or, once again, because of a historically low mortgage market, you might be able to own a home and pay less than renting. It’s worth a phone call, right? At the very least, you get to show off that fancy new credit score!
Some of these tips may require a hard inquiry on your credit report, but don’t worry. The temporary and small hit to your credit score is worth the money you could reclaim every month.
Have your checked your credit score lately? Chances are very good that it has changed since the last time you looked at it. Unfortunately, many avoid checking their credit because they fear the worse, but many credit scores go up every month. In fact, if you’re paying your bills on time, the mere passage of time is likely to increase your credit score.
Using credit (in a good way) over an extended time is one of the biggest factors in a good credit score. Pretty cool? I bet you didn’t know your credit score could be improving without you doing anything special. If you’re not checking your credit score regularly you could be throwing away money.
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