Boo-boos that can burst your credit score bubble

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I recently received a pleasant email from a reader letting me know that he bumped up his credit score by almost 100 points with information I shared in this column. In that spirit, I thought I would share some more practical tips to avoid mistakes — and maybe boost your score as well.

Trying to determine the best course of action when it comes to credit scores can be tricky because the rules can be confusing. One misunderstanding is the belief that we have to carry a balance to build credit. That could be costing you in the form of unnecessary interest payments.

Instead, a better way is to have a budget that will go to your credit card each month. Another important tip is don’t charge more than 30 percent of your total available credit. If you can keep it below 10 percent, this will really boost your score quickly. And finally, pay your bills in full every month and always by the due date.

Stick to these tips and this will help improve your credit score. And pay all your bills on time — not just your credit cards. As a reminder, your payment history makes up 35 percent of your FICO score, which can have quite the impact on your credit score.

Here are a few reasons you should care about your credit score: Prospective employers may check the credit reports of job applicants; insurance companies may use your credit scores when determining your premiums; and if you rent an apartment, your credit score will likely be checked. Finally, if you’d like to purchase a home, credit is a huge factor in the loan process.

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SNAFU WITH CARDS, REFUNDS: I received a call from a Coeur d’Alene reader who ran into an issue with a gift card purchase she recently made at a local store. She had about $30 left on the card. Since her purchase was a little more than that, she used up the remainder of the balance on the card along with cash.

To be helpful and since the card had a zero balance left, the cashier politely asked the customer if she could cut up her card and throw it away.

Not thinking she would need the card anymore, the customer agreed and the card was destroyed. But then a few days later, the customer needed to return the items she had bought using that gift card. When you return merchandise, merchants will typically put the refund back on the card you used to make the purchase.

I think you see where this story is going. No card, no refund. Since the card was cut up and thrown away at the time of purchase, it was long gone — but the woes of getting the refund were just beginning. The customer was told that without the card she used to make the purchase, it wasn’t possible to return the items. She called the Visa company to see about retrieving the number so she could get the charge back. But without the number, the Visa company wasn’t able to help, either. Now the customer hopes she can just get some store credit for the items she still wishes to return.

Moral to this story: Hang on to that zero balance gift card until you’re sure you won’t return the items you bought with it.

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NEW APPLIANCE TIPS: Buying a new appliance for your home is a major purchase so it’s prudent to do some research. Whether you’re looking to upgrade your old appliances or buy them for a new place, there are a lot of factors involved. Knowing when to buy to get the best price and where to buy to get the best deal are often just as important as what model you select.

Here’s some practical advice on how to make the best purchase for your money:

Ideally, the consumer should be looking for good deals before the appliance stops working. Otherwise, panic sets in and shopping for deals goes bye-bye.

It’s better to be more strategic in your purchase when time is on your side. A lot of good deals can be found around the retail holidays like Memorial Day, Independence Day, Labor Day and Black Friday. Sometimes these discounts can be bundled with rebates, or scratch and dent items if you’re a really savvy shopper.

Online resources help consumers comparison shop for features and prices. Even though shoppers do their research online, they still overwhelmingly prefer to purchase the appliance in a store. When shelling out money for a new appliance, consumers still like to see the appliance before they make their decision. Plus buying locally supports our local businesses, keeps sales tax in our community and keeps jobs local.

As a final thought, don’t forget to inquire about delivery. Consider this: If one merchant will deliver your item and have their professional hook it up as part of the service but costs $20 more than another merchant who delivers the item to your curb — well, I know which option I would select.

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Remember: I’m on your side.

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If you have encountered a consumer issue that you have questions about or think our readers should know about, please send me an email at terridickersonadvocate@gmail.com or call me at (208) 274-4458. As The CDA Press Consumer Gal, I’m here to help. Please include your name and a phone number or email. I’m a fulltime copywriter working with businesses on marketing, a columnist and a consumer advocate living in Coeur d’Alene.

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