Managing Your Credit ScoreA few tips to establish and maintain high ratingsRecent tallies show a third of US credit scores fall below 649. While not impossible, acquiring a mortgage loan will likely
Managing Your Credit Score
Managing Your Credit ScoreA few tips to establish and maintain high ratingsRecent tallies show a third of US credit scores fall below 649. While not impossible, acquiring a mortgage loan will likely be more difficult and more expensive at this level than with higher scores.Here are some fundamentals to guide you to establishing and maintaining a healthy and legitimate score.The somewhat obvious-Borrow only what you can afford to repay-Make all your payments on time-Avoid excessive requests for credit-Have an emergency account to pay for unexpected expenses-Check your credit report annually to contest and remove any erroneous information. The not so obviousDo not open new store credit cards to save on a purchase. New accounts will power your score and too many payments can be hard to manage. Saving 10% on a purchase of a $300.00 dollar item means little if it costs you even just a fraction on a $300,000.00 home loan.Do not open new accounts just to transfer balances on an introductory rate. In addition to possibly lowering your score, these offers often have traps. Instead use the offer to leverage a lower rate with an existing card.Do not close old accounts. If you have a good record of payments on old accounts these will benefit your score. Using them occasionally and conservatively will keep them active and will help with a good score.Do not be afraid to use credit. Without the use of credit you will have no score and that can be just as bad as a low score.Keep a high credit line and a low balance. Credit utilization ratios measure this relationship and lower is better.Maintain a variety of account types. A combination of revolving, installment and secured financing along with excellent records of payment will yield a higher score. Don’t run out and open an account just to have diversity as this is the least influential factor on your score.
Dawn Richardson and Sondra Eckert