CREDIT – We depend on credit for many important things in life from buying a car to purchasing our first home. Your credit score determines whether you can do these things and how much it will cost you. The better your credit score the more money you save in interest, fees, and over the long term. The first step to saving money begins with your credit. Take the time to know and understand your credit.
1. You can pull all three of your credit reports on a yearly basis for free from
www.annualcred itreport.com or call their toll free number at 877-322-8228.
2. Check out
www.creditkarm a.com for interactive tools and simulators to learn how to optimize your credit.
www.quizzle.co m offers you a free credit report, free credit score and also a free budget. This site also offers tips to improve your situations and links to help you understand your current credit report.
3.
www.vantagesco re.com/benefits/consumers/ explains the new innovative credit scoring model that simplifies and enhances the credit process for consumers and creditors. With the credit scoring system changes it is important to know what items impact your score.
You can improve your credit score by working on the following areas:
• Avoid missed/late payments – the easiest way to avoid late payments is by setting up bill pay automatically from your checking account. Bill pay lets you control the amount, date, and how often you pay a bill and it’s free with most checking accounts.
• Pay off debt instead of moving it around – Work to pay off your debt and maintain low balances on credit cards. For the best score, strive to achieve less than 35% of the available balance.
• Careful on opening new credit –when you apply for credit cards, each one is considered a new inquiry so forgo those opportunities to open store credit cards for a savings on that day’s purchases. Additionally, too many new accounts opened at once will raise your credit limit but lower the average account age, which will reduce your overall score.
• Changing address – frequent change of addresses can reduce your score. Consider getting a post office box if you plan on moving apartments on a regular basis or you change jobs frequently.
• Authorized users – when you add an authorized user to your credit card account, make sure that the user doesn’t overspend. Being the principal card holder, you will have to make the payments and in case you can’t afford it, your credit score would get hit along with the authorized user. Additionally, if there is a significant increase on the card amount, you can change your debt-to-limit ratio and cause a decrease in credit score this way.
• Credit Utilization – Having access to credit is one consideration, and how much credit has been tapped in another. If you have “maxed out” your credit cards and/or lines of credit you may not be able to obtain any additional credit or credit at the best possible terms. The lack of liquidity puts you as a high-risk to creditors.
