The Power Of Credit Scores

In days of old all you needed was a good name and a handshake. Country stores all over the country accepted a shake and a promise on payment. Many, many times my grandfather said he charged at the country store and paid at the end of the year when the crops were sold. Those days are gone. Today it is hard to find a friend good enough to loan you money on a handshake. This is where the power of the almighty credit score comes in. No matter if you are trying to get a new job, get a loan for personal use or buy a house it depends on that score. Even if you get approved a lower score can cost you a lot more money in interest rates. You cannot get a good score overnight. It takes work to get that good score so it should be took care of and maintained. How do you do this you ask? The easy things are the ones you probably already know. Make your payments on time, dont borrow excessively all at once and time of history of credit. These are very important but there is more to a good score than this. A big thing that gets a lot of people in trouble is credit utilization ratio. You might think because you have a credit limit of $10,000 that it is ok to go borrow this amount. Makes since, right? Wrong. Banks and financial institutions look very hard at credit utilization. They like for it to be under 30%. On a $10,000 card that would mean that you could borrow $3,000 with out it hurting your credit much. Utilize personal loans if your credit card debt gets to high. Watch you credit report. You did have to buy reports in the past but most credit cards now have free credit score look ups. Stay on top of it. Report anything that is wrong immediately to the credit bureaus. You can watch your score and see it fluctuate regular. You will learn what helps it and what makes it fall. Don’t get to many hits from loan applications. A hit is anytime someone runs a report. These stay on your report for two years! Once you have an established mortgage stay with it. The longer the history of good payment the better the score. Work with medical facilities to make payments in house if you owe any. Medical debt hits a lot of people hard, Once this debt is turned over to a credit bureau it is on your record for years. It drains a score. Try to keep this from happening at all cost. One last note before closing. There is companies out there now that advertise getting you a lower payment on credit card debt by dealing and negotiating with the companies on your behalf. BEWARE! Yes they often will get you a lower payment and debt settlement but this severely damages your credit score. This is the same as default and these companies pretending to help you make the money off the transaction while your credit is ruined. Just remember to be smart and pay attention to your score. You too will see the power of credit scores!

 

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