Credit is perhaps the most important thing in our lives. It defines our financial status and where we are in life, and it governs many of our daily decisions.
In spite of all the harm that can be done by identity theft, unscrupulous people have a tendency to go around stealing our identity with credit cards and other forms of electronic banking and money transfer facilities. This is why people who have good credit or are often over their heads in debt do not like to see their credit scores plummet.
Credit score can mean the difference between
Without a decent credit score, it is much more difficult to get a good mortgage, so it’s vitally important that you protect your scores from scammers.
You can keep your credit score at an excellent level by doing a few things on a regular basis. Some of these do not cost anything but just performing them consistently will help improve your credit score.
Every three months, you should get a free credit report from all the major reporting companies. These credit reports provide vital information on your credit. By reviewing your credit report, you will be able to make sure it is accurate and up to date.
Paying off your existing bills and new credit card bills
It can help you raise your credit score. By paying more than the minimum monthly payment, your debts will be paid off and you will also have a lower debt-to-income ratio, which will raise your credit score as well.
If you have an excellent credit history, you may still find it necessary to apply for an overdraft to purchase something like a car. However, before doing this, make sure to pay off any outstanding balances on your credit cards so that you don’t increase your debt to income ratio and therefore cause your credit score to drop.
One way to build credit is to open up accounts with many different online stores. Many sites will offer cards that are approved online and at the same time require you to have a balance on your credit card to qualify.
Financial delinquencies will reflect negatively on your credit history and will decrease your score. This is why it is important to maintain a clean financial history by making timely payments to your creditors as well as your debts.
Make sure that you always do what you can to improve your credit rating. You don’t want to be under a lot of debt when you need to take out a large mortgage, and you certainly don’t want to lose your home when you are only slightly late on your mortgage payment.
If you are over your head in debt and need to get out of debt fast, then you should consider debt consolidation. Most consolidation companies offer low interest rates, lower monthly payments, and no penalties for late payments.
The key to credit and personal finance is understanding how to use credit responsibly and above all, never misuse it. In order to get a good credit score, you need to make sure you pay all your debts on time and pay your lenders on time as well.