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| Everything You Need To Know About Credit Reports |
Jun 10th, 2010 8:52:40 am - Subscribe |
| Your credit score can be likened to your criminal record. Both follow you around for a really long time, and both are supposed to be reflections of the person you are. Only you and maybe your lawyer know your criminal record. But your credit score can be pulled when you apply for a credit card, or go to get a new vehicle, or even try to move in to a new place. For those not in the know, your credit score is based upon a number system between 300 and 850. A secret formula (OK a mathematical algorithm) will determine what your number will be. Creditors and experts both claim that your credit score is said to be a really accurate prediction of how likely you are to pay off your bills. Your credit score is an important thing to know. If you already have a credit card, the creditor will most likely look at your credit score to determine whether to decrease your credit limit, or give you a higher interest rate. Those lucky people with the highest scores get the lowest rates. But don't freak out yet if you have a low credit score; there are ways to improve your situation. Most importantly, try to pay your bills on time. Paying late or even worse, allowing a negative account to go to collection can have a negative impact on your credit score. It logically follows that the longer you pay your bills on time the better your credit score will be. Attempt to pay off debt rather than move it around. It's just the most effective way to improve your credit score. Don't close your unused credit cards. Closing is going to close the gap between the amount of credit you are using, and the whole amount available. If you have a lot of credit, and only use a little, its good. And for the love of God, do not open new accounts. New accounts are just not helpful in credit scoring because they will make your average account age lower. Which leads me to my final point. Longevity. Try to maintain your oldest accounts. Longevity has a lot of clout on credit reports, so the oldest account you have is the most available. |
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