You Are Your Credit Scores Worst Enemy
When applying for loans, credit cards,
or even trying to lease a new apartment your credit
score is the major determinant of how well you will
fair. Ironically very few people know what their credit
score is and are not aware of the fact that they may
be doing various things to hurt their credit score.
If a high credit score is important to you, and it
should be, beware of the following things to keep
your credit score in check.
Have you ever had one of those months
where everything seems to pile up and you just cant
make ends meet? You take a look at what you owe, who
you owe it to, and finally decide that the credit
card payment is going to have to wait until the next
check. Not even that, lets cay you just forget to
make your credit card payment on time. This is the
first and most common mistake: missing payments or
making late payments. If you know it or not every
time you make a payment to any of your lenders, they
report what amount you have paid, and whether you
were on time or late. If your late basically consider
it much like getting a test question wrong, your credit
score drops. In addition, they will report how late
you were, and your record of lateness will be represented
on your report. Now you want to get a loan for a new
car and the dealer pulls your credit report and your
credit score shows you were late X amount of times
last year. Put yourself in his shoes. If you lend
your buddy $20 and he pays you back immediately you
will lend him money again but if you have been waiting
for that $20 for over a year next time he asks you're
not going to be as keen on it are you? If its clear
that you have a habitual pattern of paying your bills
late, they will think twice about lending you money.
Second, this is another one people never
consider will hurt their credit report and I know
when you read this you will realize you are guilty
of it. If you get a mailing promoting a 0% credit
card or a new great rewards credit card and figure
you could use another card do you apply for it? Well
if you do you could be docking your credit score yet
again. Every time you submit an application for a
credit card or apply for a loan the credit agencies
are notified of your credit report being pulled and
checked. If this happens too many times it will undoubtedly
hurt your credit score. The credit agencies will look
at those inquiries as attempts to get credit or a
loan and if those don't follow the inquiry it reflects
poorly because it seems as though you're not getting
approval. No one (except the credit reporting agencies)
knows the formula for how many inquires will hurt
your report, but the general rule of thumb is simply
not to apply for credit unless its absolutely necessary.
Lastly is another tip to look out for
that I am sure most people don't really think about
and that's leaving credit cards on your credit report.
I know its the opposite of what you have been taught
but lets think about it. If you have a credit card
on your credit report that has been paid on time every
time its a star on your credit report. Removing it
would dock your score believe it or not. Of course
credit scores favor accounts that are active so try
and keep charging small items and paying them off
regularly to maintain this benefit on your credit
score and you'll be surprised how quickly your credit
score will increase.
Jason Jell is an expert on credit, loans,
and debt management and maintains a website (http://www.internetcreditcardlist.com)geared towards showing
others how to find the best credit card offers no
matter what their financial situation.
http://www.internetcreditcardlist.com
