Tag Archives: balances

7 Ways To Protect And Improve Your Credit Rating

Your credit score accounts for the amount of interest you have to pay for a loan or a credit card. Increasing your score in just a few points will make a big difference in the interest rate you will pay for a purchase. If your credit score is high enough, you’ll have no problem qualifying for a lender’s best rates and terms on auto financing, home loans and small business loans. The following are a few tips about how you can protect and improve your credit rating.

1 – Order Your Credit Report. Your credit score is based on your credit report, so you should begin by ordering your reports and reviewing each one for accuracy. You can get your reports from a service such as MyFico.com, or order from Equifax, Experian and Trans Union separately online or by phone.

2 – Check Your Credit Report Information for Inaccuracies. Check the identifying information for name, social security number, birth date and incorrect address. Make certain that old negatives and paid-off debts are deleted. Check for accounts and delinquencies that are not yours, late payments, charge offs, lawsuits, judgments or paid tax liens older than seven years old. Also, paid liens or judgments that are listed as unpaid, duplicate collections, bankruptcies that are older than ten years and any negative information that is not yours.

3 – Always Pay Your Bills on Time. Payment history makes up more than a third of the typical credit score. If you paid bills late in the past, you can improve your credit score by starting to pay your bills on time. Lenders are looking for any sign that you might default, and a late payment is a good indicator that you are in financial difficulty.

4 – Keep Credit Cards Balances Low. Carrying smaller balances is the best way to increase your credit score. The score measures how much of your limit you use on each credit card or other line of credit, and how much of your combined credit limits you are using on all your cards. Within 60 days, paying down credit card balances can increase your credit score by as much as 20 points.

5 – Try Not to Open In-Store Credit Cards. Although your first credit accounts can serve to build and improve your credit history, there comes a point when each subsequent credit application can reduce your score. New credit cards reduce the age of your credit history, and a department store credit card isn’t good evidence of credit worthiness. Every time you apply for a retailer’s credit card your credit store gets dinged.

6 – Be Conservative When Applying For Credit. Having at least one credit card that’s more than 2 years old can help your score by 15 percent. Make sure that your credit report is checked only when necessary. Or, if you are shopping for a home, try to apply for loans within a two-week period. By keeping the loan process within a two-week period, all of the credit report lookups are seen as one single request.

7 – Don’t Close Credit Cards or Other Revolving Accounts. Shutting down unused accounts that have outstanding balances without paying off the debt changes your “utilization ratio,” which is the amount of your total debt divided by your total available credit. It will reduce the gap between the credit you are using and the total credit available to you, and that can hurt your credit score.

Top 10 Credit Card Tips (Page 1 of 2)

The credit card has been one of the most popular inventions of this time, helping consumers acquire convenience and boosting consumer spending for the economy. However, credit cards have been exploited for the wrong reasons, and thus have become the main source of debt for many consumers. Thus, in order for credit cards to be beneficial, consumers would need to be well-informed on the proper usage of credit cards.

1. Pay off your outstanding balances each month

Rolling over outstanding balances will only result in snowballing debt. Credit card interest rates are amongst the highest as compared to other types of debt. With this, your cost of expenses is increased without any apparent benefit to you.

2. Transfer your high interest credit card balances to 0% APR credit cards

If your outstanding credit card balances are high, you should work out a balance transfer to other credit cards that offer introductory 0% APRs. This way, you can stagger monthly payments and pay off your credit card debt gradually without incurring additional interests.

3. Cut up high interest credit cards

It’s time you evaluate your credit card interests, and cut up those that charge high interest rates, no matter how wonderful their reward programs at. At the end of the day, the rewards attained will not equate the additional interests incurred.

4. Be careful with your credit limit

As your credit limit may be 2 or 3 times greater than your monthly income, it can be fairly easy for you to overspend. Thus, when using your credit card, be sure that you don’t charge more than what you can truly afford.

5. Check your credit card statements

Contrary to what you may believe, banks and credit card companies may make errors in their billing statements to you. Thus, it is best to have a habit of cross checking your credit card charges before making payment.

6. Automatic transfer payments

If your credit card is being used for grocery shopping, you can always arrange for an auto-payment with your bank to ensure that you always pay on time. However, you would still need to cross-check your credit card statements and make a complaint if you find any discrepancies.

7. No credit cards when window shopping

Do you have bad control over your shopping habits? If you are on a window shopping spree, it may be advisable not be bring your credit card. How else would you buy anything if you are out of cash with no credit cards? This is a good way to stop yourself from impulse purchases.

8. Be aware of your rights

Consumers are entitled to rights when it comes to making purchases. The government has set forth many guidelines for retailers in order to protect consumers. Thus, if you have paid for something which did not get sent to you, or if you purchase something that turns out to be faulty, you have every right to demand for a refund or make a report to the Federal Trade Commission.