Your credit score which is also known as a FICO score has become an principal evaluation of many Americans and can be widely shared. It is used to determine how much you can borrow, how much you pay for various insurance policies, if you can rent from a house or apartment from landlords, and it can be a factor in determining the interest rate you pay on a credit card or a mortgage.
Previously, only financial instituations or lenders checked your credit. Today, it is a common practice for a potential employer to perform an analysis of your credit report to determine your financial responsibility, obligations and payment history. Many employers have decided that your credit report paints good picture of the person you are and also let’s them know quite a bit about your past.
Regardless, keeping a good score and knowing how to manage your own credit and credit report is crucial. Achieving great credit scores should be on your list of wealth building strategies. Author John R. Ulzheimer has a great book that helps expand on more credit report secrets and how to build your score, because in the world of credit…..You’re Nothing But a Number.
The ratio of your outstanding balance to the available credit limit will affect your credit score. The closer the balances are to the limits, the lower your credit score. Real estate and car loans which are known as “installment loans” on a credit report affect your score to a lesser degree than credit card accounts or “revolving accounts”.
Here are some general rules to follow to help keep up your credit rating:
Pay your cards off every month by the 20th day.
If you are going to keep a balance on a revolving credit account, keep it below 12% of the available limit.
Never close old accounts. This helps raise your “available credit to outstanding balance ratio”
When shopping for a mortage or car loan, only allow inquiries on your credit to occur within a 2 week window of each other. This way your credit score is only deducted for the equivilent of one inquiry request.
You CAN beat debt and build great credit.
If you would like to comment on this post or if YOU have any CREDIT REPORT TIPS or SECRETS, please let us know!
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