Credit Score – 5 Things You Can Do To Get a Good Rating
Credit. Another thing to worry about, right? Well, here are a few simple, easy-to-understand things that you need to know about credit. Essentially it’s your financial scorecard that the business world uses to determine whether or not they should, say, loan you money for a house, give you a credit card, rent to you, employ you, insure you, etc. (see the whole list of who checks your credit here. (http://www.privacymatters.com/credit-information/credit-score-check.aspx) Your score can range from 300-850 points, and a higher score is better. Your credit score tells whoever’s inquiring how good you are with your money. It’s pretty simple in theory: Pay yourbills on time and you’ll look great, but if you have money problems, your credit score might hold you back.
Here are 5 things you can do to
get a good rating:
get a good rating:1.Pay your bills on time. 35% of the score is based on your ability to make payments on your car loans, phone bills, lines of credit, etc. If you make payments later than 90 days after or have something go through collections, your score can be affected.
2.Don’t owe more than 90% of the credit available to you. Creditors want to know that you aren’t maxed out all the time.
3.Have credit available to you for a long time. The longer the better.
4.Having different kinds of credit is good. A mix of a mortgage, a car loan, student loans,and credit cards is better than credit cards alone.
5.Don’t get your credit checked if you can avoid it. Each time your credit is checked, it can take up to 50 points off your credit score!
And here are some things to avoid doing. I know it can be challenging to be financially wise all the time, but maybe if you read them, you’ll remember and try to avoid doing these things, because good credit is the goal!
Always paying the minimum payment. Sure, it’s not going to make next month’s bill any smaller, but paying off more than the required amount is a good idea.
Having leftover amounts carry over from bill to bill. This just creates a perpetually overdue account. Not good.
Ignoring bills completely or living with maxed out credit cards. As you can guess, both of these things are even worse for your credit than just making minimum payments.
Applying for loans all over the place trying to get someone to approve you. Chances are that if one turns you down, most of them are probably going to turn you down. Work at restoring your credit for 6 months and then try again.
Applying for bankruptcy or defaulting on your mortgage. Basically, avoid these at all costs. The word “devastation” comes to mind when I think about what these things can do to your credit. If you have any questions about your credit, how to check it, or how it affects your mortgage, leave a comment or send me a message.