This is the 3rd article in a series of 3 articles discussing Credit Scores. The first article discussed the definition of credit scores and understanding how they come about and the second article discussed Myths and Facts in understanding credit scores.
This article will discuss tips that you can use to help maintain, increase or protect your credit scores.
TIP # 1: DON’T FORMALLY CLOSE AN ACCOUNT
In a prior article we talked about the benefits of maintaining long standing accounts and how it is reflected on your credit scores. The longer the better. It is better for your credit score to allow a creditor to close your account for inactivity than for you to close the account yourself. This means that even if you are not using the account, allow it to stay open until the creditor closes it.
TIP # 2: TALK TO THE CREDITOR IF YOU ARE LATE ON A PAYMENT
If you fall behind or miss a payment, call the creditor to explain and ask the creditor to reduce or waive the late fee and NOT report the matter to the credit bureaus. Just making the payment may not be enough. Call and plead and there is a good chance that they will not report the missd payment if you have been a good customer.
TIP # 3: DO NOT USE YOUR CREDIT CARDS FOR EVERY SMALL PURCHASE
Many people are in the habit of using their credit cards for coffee, take out food and whatever. And, some people use the credit cards just to build up reward points. STOP! Your credit score is partially based upon how much debt you have compared to the amount of credit available and you may be lowering your credit score by excessive usage even though you are paying in full each month.
TIP # 4: KEEP YOUR CREDIT DEBT LESS THAN 1/2 OF YOUR CREDIT LIMIT
Just like Tip # 3, keeping your credit use to less than half your available credit will limit any negative impact on your credit score.
TIP # 5: ASK WHETHER YOUR CREDIT SCORE WILL BE CHECKED
Whenever you open a new bank account or apply for credit, there may be a “hard-inquiry” on your credit report. Too many of these hard inquiries during a short period of time can negatively affect your credit score. “Soft inquiries” by ongoing creditors is generally not a problem. And, multiple inquiries by creditors during a short period of time, such as when you are shopping for a car, are also not a problem. So, when you are talking to a banker, insurance sales person or any other type of possible purchase, ask whether they are going to check your credit and save those inquiries for when you are seriously shopping.
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