Your credit score can be likened to your criminal record. Both will follow you around for a very long time, and both are supposed reflections of the person you are. Only you and perhaps your attorney will know your criminal record. But your credit score can be pulled when you apply for a credit card, or go to get a new car, or even try to move in to a new place.
For those not in the know, your credit score is based on a number system between 300 and 850. A secret formula (OK a mathematical algorithm) will determine what your number will be. Creditors and experts agree that your credit score is said to be a very accurate prediction of how likely you are to pay off your bills.
Your credit score is imperative. If you already have a credit card, the creditor will probably take a gander at your credit score to try and decide 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 wig out yet if you have a low credit score; there are things you can do in order 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.
Try to pay off debt rather than just move it around. It’s really the most effective way to help your credit score. Don’t close your unused credit cards. Closing will close the gap between the amount of credit you are using, and the sum amount available. If you have a bunch of credit, and only use a little, its good.
And for the love of God, don’t open new accounts. New accounts aren’t even useful in credit scoring because they will diminish your average account age. 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.
Mallory Megan is employed bya debt collection company. Also, shewrites pieceson consumer spending, business, financeand debt collection.
