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How to Keep Your Credit Score in Great Shape

How to Keep Your Credit Score in Great Shape

Credit repair can be a lengthy and frustrating process. Once you’ve finally achieved a healthy score, there are a few things you need to do in order to prevent it from slipping again. Self-discipline is vital to a healthy credit score. The key to achieving a score in the high 700’s (and possibly up into the 800’s) is through cultivating good spending habits. Here are a few handy rules-of-thumb when it comes to your credit. Use Credit, but Use it Wisely To maintain a high score, you still need to use credit. Lenders want to see that you’re using credit responsibly, and if you’ve gone a long time without using credit at all that can actually lower your score. So you don’t necessarily have to cut up all your credit cards and close all your accounts once they are paid off. Keep at least one credit card (or possibly several), and use it responsibly. Don’t Use More Than 10% of your Credit Limit While you should be utilizing your credit, you should never carry a high balance on any credit card. If you carry a balance that is more than 10% of your credit limit, it can negatively impact your score. Instead, keep your balance below 10% of your limit, and ideally pay your balance down to zero every month. This has the double benefit of strengthening your credit score and making sure you don’t spend money on interest. Don’t Miss a Payment A single late payment can ding your credit score. Don’t let all your hard work slip away with missed monthly payments. Instead, set up an automatic payment plan....
6 Steps to Understanding Your Credit Report and Improving Your Score

6 Steps to Understanding Your Credit Report and Improving Your Score

When you print out your credit report in its entirety, the big stack of papers can be a little daunting. You can probably tell if you’ve got a great score, or one that could use a little improvement, but what does all the extra information mean? And how can you use the information contained in your credit report to improve your score and repair your credit? There’s more to a credit report than just the score. If you have a low score, then the key to improving it lies within the report itself. Here are 6 steps to unlocking the secrets of your credit report and finding ways to improve your score. Step 1: Double Check Your Personal Information for Errors At the top of your report is personal information that identifies you, including your name, present and past addresses, and employment info. If any of this is inaccurate it could negatively impact your score, so double check every little detail to make sure it’s correct. A misspelled name or incorrect address could mean that someone else’s credit history is being included on your report. When you spot errors, these are the easiest to fix. You can send a credit dispute letter to the credit bureaus or get the help of a credit repair company. The credit bureaus are required by law to fix any errors to your report in a timely manner, and at no cost to you. Step 2: Review Your Credit Summary The next portion of your credit report is your credit summary. It provides an overview of the report, including the types of accounts, number of current and...
How to Protect Your Credit Score Before and After a Divorce

How to Protect Your Credit Score Before and After a Divorce

Divorce has a way of destabilizing life in unexpected ways. For example, your credit score may be at risk of taking a hit during a divorce, unless you’re careful and take several steps to protect it. This is because the typical married couple’s finances are so intertwined, that disentangling the various debts and accounts can take significant time and effort. As long as you are vigilant (and keep a spirit of cooperation with your ex-spouse), then there’s no reason why your credit score should go down after your divorce. Get Copies of Your Credit Reports Your first step should be to obtain copies of all three credit reports from the credit reporting bureaus. This will allow you to identify all your accounts that are jointly held between you and your spouse. As part of the divorce process, you may be issued a “divorce decree” by the court. This is a way of splitting up assets and debts between the two parties, but it’s up to you to do the legwork. You’ll need to contact creditors, close accounts, set up new accounts, and all other necessary steps yourself. Do Your Best to Close Your Joint Accounts BEFORE you Divorce Ideally, once your divorce is finalized you won’t have any active joint accounts. This isn’t always possible, depending on many factors including whether or not you’re carrying any balances. But as long as you continue to hold joint accounts with your ex-spouse, then your credit score will be affected by his or her missed payments, bankruptcy, etc. The best way to close a credit card account, obviously, is to pay the balance off...
Why Is It Important to Have a Squeaky Clean Credit Report?

Why Is It Important to Have a Squeaky Clean Credit Report?

On the complete spectrum of credit scores (350 for bottom-of-the-bucket scores, and 850 for unattainable perfection), it’s likely that your score leaves a few things to be desired. For example, maybe you have an overdue payment from several years back still haunting your score, or an error that you’ve been attempting for months or even years to correct. One of the most frustrating things about credit scores is that even one relatively minor negative item can bring down an otherwise squeaky-clean report. No matter how many positives there are in your report (low revolving balances, established credit history, years and years of on-time payments), that one mistake or negative item still sticks out like a sore thumb. Even One Negative Item Can Drop Your Credit Score Substantially It’s sad, but true. Most of the time, these blemishes will stick around on your credit report for years and years (late payments last for 7 years). On the other side of the equation, improving your credit score is much harder than wrecking it. Building up good credit history takes years of dedication and perseverance. Fixing errors often involves writing multiple letters and enduring a long bureaucratic process. So why is it so important to guard your credit from any negative items? Why is it necessary to maintain a squeaky-clean credit report? Credit Is Ubiquitous in Our Society Your credit score touches on so many aspects of your life. For example, a good credit score can help you: Get a home mortgage Secure a low interest rate on any type of loan Get a car loan Land a job Start your own business Take out a student loan While...
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