Credit Score Do’s and Dont’s

Thu, 27 Aug 2009 05:19:59 +0000

There are so much advice out these about how to improve your credit score and what you should do to maintain it. Here is a quick list to help you know what is best for your credit score.

Do: Pay your Creditors on Time

This seems obvious but is a struggle for many individuals. This is actually the single worse thing you can do to your credit score becuase your payment history carries such a large weight.

Don’t: Close Old Accounts You Don’t Use

First, closing old accounts could hurt your credit history. More specifically the average of all your accounts. This is a another major factor in your credit score and closing old account will skew the average. Also, you will lower the total available credit you have and thus raise your debt to credit ratio. Another factor that will weight against you in the credit score formula.

Do: Use a Budget Each Month

You need to know where your money is going at all times. A budget is essential to ensure you pay everything on time and pay down any debt you have. This will prevent you from saying at the end of the month where did my money go?

Do: Check Your Credit

You are allowed access to your credit reports free one time a year so take advantage of it. Creditors sometimes make mistakes and you need to check to see if your report is accurage. Cleaning your report of potential errors is a great way to get an instant boost to your credit score.

Don’t: Think You Can Close An Account To Make It Go Away

Many times individual will have an account that has many delinquencies and other issues, but thinking if you close it to make not appear on your credit report is wrong. It will stay on your credit report so there are many times no reason to close it and again you might be hurting your debt to credit ratio.

Do: Shop for Auto Loans and Mortgages

Sometimes you might hear the credit myth that shopping for credit will kill your score because of the credit inquires. Well, this isn’t exactly true. Consumers are allowed to shop for loans that represent a large purchase such as a mortgage or auto loan. They are not suppose to shop for unsecured loans like credit cards. These you know the terms up front and there is no need to shop.

Well, again these are just a few and there are many more, but hopefully there will be more of these down the road for me to write about.

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Are Late Payments Killing Your Credit Score?

Fri, 13 Feb 2009 22:17:01 +0000

Are you paying your credit cards or bills late every month. Stop! This could be on of the single worse things you could be doing for your credit score and credit standing.

First, late payments are going to cost you a lot of extra money. First, there is always going to a late payment fee accessed to your account. This is free money to your accounts. It also will be pretty expensive. This fees have a wide range and will be just added onto your bill.

Second, late payments could cause your interest rates to rise on your credit cards. Credit card accounts look over your credit report frequently and if there are late payments, they can raise your interest rates. This is even true if a late payment is made to one account, another account can see and raise your rates.

Last, late payments are going to stay with you for awhile. These will be on your credit report for a minimum of seven years. Ouch. So they will have a lasting effect on your credit.

So if you are presently late with your accounts, you need to do anything to get current. Then you need to setup a budget and start paying on time. No excuses.

Credit Score Do’s and Dont’s There are so much advice out these about how to...