3 Great Tips To Keep A Good Credit Score

By:


A high credit score is often the most important part of your financial situation. Your FICO score is the basis for the interest rate paid on credit cards, car loans, and mortgages. The higher the score, the less threat you are to lenders, and so the less you will have to pay in interest to make it worth their risk.

To reach and keep a high credit score, the first step is just to make your payments on time. Other than declaring bankruptcy, this is the largest determiner of your credit score. The minimum balance of all bills must be paid by the due date consistently and without exception. Late bills and defaulted payments can cause the worst damage to a credit score. If you are unable to make the minimum balance by the due date, contact the credit early to see if arrangements can be made. In desperate cases, bankruptcy can eliminate the debt, but remember bankruptcy tanks your credit score for the next seven to ten years.

The next step is to lower the debt to credit ratio. There are essentially two ways to do this.First, either pay down some of the debt or ask for a higher credit limit. Be careful if you ask for a higher credit limit not to use it as an excuse to spend more. If you do pay off a credit card in full, do not cancel that account as long as it has no annual fee. Cutting the card can keep you from using it, but it will protect that available credit which lowers your debt to credit ratio.

Your credit score is also affected by the average age of your accounts. If an account is older, it has a longer history of paying online which represents lower risk to the lender. This is another reason not to close accounts unless it is relatively new. The final piece of your credit score is determined from having the right mix of credit cards, retail cards, and installment loans. If you can juggle a mortgage, car payment, department store card and credit card for a long period of time with more credit than debt and without missing payments, then you are obviously a low risk to the lender. Remember low risk equals high credit score.

It is important to maintain your good credit score. Follow these tips and you will be well on your way.

About the Author:
Mike answers the questions What is a good credit score and How to raise credit score . If you are interested in protecting your credit score then visit his website for further information.



Article Originally Published On: http://www.articlesnatch.com


Tags: ,

|

Loading...
Related....
Videos...

Recent UnCategorized Articles

Comments

Still can't find what you are looking for? Search for it!

Loading

Site Navigation:

Copyright 2005-2011 ArticleSnatch, LLC - All Rights Reserved.
Privacy Policy | Terms of Service.