Protect Your Credit Score

Whether you are applying for a home mortgage, a new car purchase or lease, or applying for a credit card with a better interest rate and rewards, your credit score will be the first to be looked at when your information is reviewed for approval.  In order to capitalize on the best interest rates on the market, you will need the highest score you can, because every point matters, and the more you pay in interest, the more out of pocket instead of paying off debt or saving for your future.

Look for Inaccuracies

With the amount of fraud these days, it’s important to make sure that no one has stolen your information and went on a spending spree.  Within the past year I have had my debit card and credit card compromised, which I now will only use my credit card for all purchases because if your debit card is compromised, your bank account will get wiped out with purchases.  At least with a credit card, you can dispute the charges and will not have to worry about them while they get sorted out, probably finished by next statement due date.

Never Miss a Payment

A large portion of your credit score has to do with payment history, so it’s important to pay your bills on time, not only to avoid a late fee or possible interest rate spike, but if you are more than thirty days late, it will show up on your credit report.  Sure, everyone makes mistakes, but do your best to avoid making any credit mistakes, because every payment you accidently miss that’s over thirty days late will be reported and stay on your credit report for up to seven years, which is a huge amount of time.

Keep Debt Low

Just as important as payment history is how you handle the available credit that you have.  If you charge up your account and reach your credit available ceiling, your score will significantly drop, so it’s important to pay off the balance at every statement due date.  Since credit is reported once a month and you don’t always know when, if you make all your charges with a credit card like some do, that balance could be reported before you pay, so you could always pay a couple times a month to ensure that the balance never gets too high by the time it’s reported.

Limit Applying for Credit

While it’s not the large portion of your score as payment history or the amount of debt that you carry, but the amount of credit pulls you have on file does impact your score, and not only will it take your score down, these inquiries will also stay on your credit report for up to two years.  It’s important to not try and apply for too many without being sure you are going to proceed, because you definitely do not want to give the impression that you are looking to get a bunch of available debt to go on a spending spree.

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