Some people don't understand the importance of maintaining a good credit score. True, acquiring and keeping a high score requires a consistent plan, but the benefits are well worth the effort. When applying for a credit card or home loan, a good credit rating helps you get an approval, and you're more likely to get a low finance rate.
Don't Ignore Old Debts
Just because a creditor stops collection attempts on your delinquent account doesn't mean you're off the hook. You're still responsible for this debt, and failure to satisfy the debt will result in a negative remark on your credit report and a lower score. Paying an old debt or collection account may move the lender or creditor to remove the collection from your credit report.
Stay Current on Your Bills
Even if you have a history of paying your bills late, you can start anew and begin paying all your bills on time each month. It takes time, but by paying attention to your due dates and mailing payments days before the due date, you'll gradually improve your credit score.
Don't Carry a Balance
Because credit cards tend to have high limits, it's easy to use them often. Of course, this is an easy way to acquire debt, and too much debt (having credit cards that exceed 30 percent of the credit limit) can lower your credit score. Decrease your debts by paying more than the minimum and only charging what you can afford to pay off within a month's time.
Check Your Own Credit Report
Reviewing your own credit report doesn't count as an inquiry. In fact, everyone should check their own credit report at least once a year. Assessing your personal history helps you learn your credit standing and it's the easiest way to recognize mistakes or check for signs of identity theft. Request free online reports from Annual Credit Report.
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