Just like keeping your body healthy, healthy credit takes a bit of time, and some dedication. These five tips will keep your credit strong!
1. Monitor your credit report. Just like starting our any exercise or diet plan you need a check up to see what area’s you need to work on. Credit monitoring will keep you informed as to where you are right now, and what your goals are.
2. Pay your bills on time. Nothing will sink your score fast than a late pay. In the short term you will have fees and penalty’s in the long run it will hurt you even more. After a few late pays your score will be down as much as 100 points costing you thousands of dollars in higher interest rates.
3. Do not max out your available credit. If you do not know what your total available credit is, log into your credit monitoring account and take a look. If you want to build credit it helps to maintain around a 30% balance. That shows that you are using your credit and you are paying on it monthly. Maxing out your available credit shows creditors you are potential struggling to pay down your debts, and it will effect your score.
4. Careful when closing down old accounts. So you may have had a Hello Kitty card from back in the day that you just never use, or have outgrown. That card even though it has not had a balance for 15 years, still is active on your credit report, and counts as available credit. Closing down that account will show a decrease in available credit and bump up the percentage of credit you are using.
5. Be selective. Just because there is a Hello Kitty card does not mean you should apply for it. Credit stays with you for a very long time, so choose wisely. Also when you apply for credit your score will take a short term hit called a hard inquiry. When a company pulls your credit report it will negatively effect you for a short term. You can check your credit monitoring anytime as this is a soft inquiry, and will not harm your score at all.
With these few simple tips you will be on your way to very healthy credit. The most important thing we can stress is to keep your credit report monitoring active, as its link to your credit. Think of it as your personal trainer.
ShareAt Best Credit Reports we know how important credit monitoring is, and we want to show you how simple errors can really have an impact on your credit score.
Just one or two very common and simple errors could mean the difference in interest rates on loans that could end up saving you hundreds if not thousands of dollars on the life of a average loan.
It is reported that as many as 4 out of 5 reports have errors on them.
One common error that could cost you is the credit card companies reporting incorrect limits on your cards. For example we recently had a client sign up for credit monitoring and they were shocked to find out they were using over 60% of their available credit! There first thought was that someone had stolen a credit card and was racking up debt.
After a little more review it turned out that a very high limit credit card, about $25,000 was reporting a limit of $2500 seriously throwing off what was the true amount of credit they had.
This mistake could have a serious effect when applying for a loan. For someone with a good credit score of 700 or above a simple mistake like this could cause as much as a 40-50 point drop! This would have a huge effect on the rate you would receive on any loan.
Another common mistake that has even a more drastic effect on your score would be a false reported late payment. Even just one mistaken late payment could drop your score as much as 100 points.
Credit Monitoring is really the best way to stay protected against mistakes. Any changes that are made to your report will be caught with the your credit report monitoring and you would be notified within 24 hours.
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