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Managing and maintaining a good credit score

By Ruth Racey
Published: Tuesday, January 1st, 2013

There are various things that a person can do to make an improvement on their credit rating. The first one is communication. Once in a while everyone experiences problems with their finances. Sometimes these difficulties present themselves just when your balance was due. In such a case, you need to call your creditors early enough to inform them of your situation. You should discuss with your creditors the amount of money you would comfortably pay without straining. Creditors can help by reducing the monthly fee to something manageable to you. Once your financial situation improves do not keep quiet but call them to have them change the deductions to normal once again. You will be surprised how understanding some creditors are.

Anyone who is going through financial problems could be tempted to apply for new credit cards to help them out. However these new cards reflect negatively on your credit rating. Every time you make an application for a new card, a creditor sends an inquiry to the bureau. The report they receive from them will enable them to have access to your credit history. However this is not a problem. The problem is that these inquiries are put on your records and anyone who looks into your records will see that you had many inquiries which could mean you could be in trouble financially. You should refrain from new credits at all cost.

Improve your credit rating by making sure that once you close an account it’s really closed. You could have closed an account but it has not been reported as closed by you. In such a case it might reflect badly on you. Before you close any account though, make sure you pay off any bills that you owe. However, experts recommend not closing accounts because if it lowers FICO score and if wrongly done it would damage your credit score.

You can also improve your credit rating by mixing credit loans. IF you have a mixture of credits FICO score will go higher. FICO carried out some research and found out that people who have debts are usually the ones who are less risky to give money to. Most lenders work on this principal. Therefore, having more debts can increase you FICO score. This is not to say that you should have debts all over and you are not clearing them. Debts that are not being cleared reduce your credit rating.

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