Itâ€™s that time of year where everyone resolves to â€œfixâ€ something or do something better.
Individual credit reports / scores affect the consumer in many different ways. It dictates if youâ€™ll have higher insurance rates, utility deposits, credit card rates, auto loan rates, personal loan rates, and mortgage loan rates than another consumer with a better report / score. It could even affect a consumers chance of securing employment or any type of credit account. Itâ€™s easy to see how a good score and a good report is more cost effective and should be taken very seriously.
When was the last time you looked at your credit report? Should you resolve to fix your credit?
Here are some tips:
3 things you can do right now.
1. Check your credit report! Often times there are errors on a report that the consumer isnâ€™t aware of. Check all of your open accounts to be sure you recognize them. Check to be sure that there are no late payments listed incorrectly for any of your accounts. If you find an error, dispute it with the credit bureaus immediately. For a free copy of your credit report: https://www.annualcreditreport.com/cra/index.jsp
2. Set up automatic payments for all of your credit accounts. Most banks will allow this to be done online and will even send emails or text messages to remind you when the bill is due. Credit score is decreased with every late or missed payment so donâ€™t be late!!
3. Reduce the amount of debt you owe. Stop using your credit cards or pay them off every month. If you are too far in debt to pay them off in a month, make a list of your accounts and make a plan to begin reducing the balances (ohâ€¦and STICK TO IT).
How to maintain good credit and fix your score.
1. Pay your bills on time! Payments that are late, even by a few days in some cases, have a MAJOR impact on your credit score. Payment history contributes 35% to your score calculation. DO NOT miss payments!
2. If you have missed payments, get back on track immediately. The further you get away from the missed payment, the more your score will increase. Make up the missed payments and stay on track. Once the negative credit is behind you, itâ€™s only a matter of time before you start seeing an improvement.
3. Be aware that paying off a collection account does not remove it from your report and it will continue to count against you for 7 years. Tip: Donâ€™t let your accounts got to collection! If youâ€™re in financial trouble, work it out with your creditors. Thatâ€™s why programs such as short sales for distressed homeowners and work out plans for credit accounts exist. DO NOT IGNORE or you will go to collection.
4. Seek options if you are having trouble making ends meet. There is help out there. The sand is not a good option, so donâ€™t bother to bury your head in it.
1. This contributes to 30% of your scores calculation. Keep your balances LOW on credit cards and other revolving credit. High balances equal low credit scores.
2. Pay off your debt donâ€™t just move it around from account to account. Having the same outstanding balance but fewer accounts still decreases your score.
3. Donâ€™t open many credit accounts to increase your available credit. It will backfire and decrease your score.
Length of credit history:
1. Most donâ€™t know this but older accounts in good standing increase credit scores. Keep your credit accounts current and balances low and, the more time passes, the more this will have a positive affect on your score.
Checking your credit:
Most people know that numerous â€œhitsâ€ to your report, wether you are rate shopping or buying a car or a home, decrease your score. What most donâ€™t know is that as long as itâ€™s the same type of inquiry, all mortgage company inquiries or all credit card company inquiries, and itâ€™s done in a 2 week period, it will only count as one â€œhitâ€ to your score and will really only decreases it a few points. Itâ€™s a negative impact to hit your credit with all different types of inquiries in a short amount of time.
For more information or for assistance with correcting your credit score (we have tips and contacts that can help get your credit back on track) call Katie at 602.476.1942 or email her at email@example.com.
Donâ€™t let a low credit score keep you from being a homeowner in this fantastic buyers market. 2012 is the time to invest in a new home before the prices start to increase more rapidly.