Thursday, February 23, 2012

10 Tips To A Higher Credit Score

By Eric Stafford

These days most of us avail loans to buy a house, set up a business, or buy a car. Many students take loans to further their education. How soon the loan is sanctioned, the rate of interest, and the amount sanctioned will all depend on your credit score which is based on your credit report. People with scores of 700 and more are the beneficiaries of lower interest rates and quick sanctions. Imagine if your score is greater than 700 and another person has a score of 698 then the person with score 698 will have to pay interest that is higher by one-half percentage point. And, this means over a year a person with a lower score will pay USD 19,000 and more as interest on a loan of say USD 165,000.

A credit score takes into consideration: payment history, current earnings, current debt, length of credit history, types of credit utilized, and your new credit.

A good credit score of over 700 is easy to attain. There are some quick and easy things you can do, starting today, to help build your score.

Keep a clean, lengthy credit history by making payments on time and keeping your oldest credit accounts active.

Be sure to not let your accounts go over 30 days past due. You must make sure you pay at least the minimum due.

Do not run up all of your credit cards. You want to always have credit available on every credit card you have. Do not have over 3 credit card accounts.

Review your credit report every few months to ensure it is accurate and take action on any incorrect or bad accounts.

Write a budget and plan your finances. You will be amazed at what you find and what you can accomplish when you write down your expenses and actually see how your money is being spent.

Try to avoid "balance surfing" and maintain a good standing on your oldest accounts.

Should you find yourself in a tight spot, call the creditors and try to negotiate a plan to avoid penalties or late fees.

Late or delayed payments drive your score down so always pay bills dead on time. Keep a tab on due dates and ensure that all bills are paid.

Learn all you can about credit reports and scores and keep the criteria in mind while managing your finances. Maintain the debt-to-credit limit ratio and, if need be take the help of a finance planner.

Do whatever it takes to avoid bankruptcy. Bankruptcies remain on your credit report for 7 years and nothing will hurt your sore more.

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