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Credit score: How to maintain it?

By Janet Lacey
Published: Saturday, November 14th, 2009

The markets today and the financial slowdown in general are making life difficult for people. A simple task of maintaining a good score is now posing to be a challenge for one and all. People are succumbing to the pressure. In order to keep them alive financially they are borrowing heavily from one bank to clear the loans from the other. Taking a loan from a bank is fine, but only if one knows how to maintain a good credit score. In a way, the credit scores will earn you a good reputation among the banks and work to your advantage.

It is important that you let the credit score be and not get too worried or obsessed over it. People who get carried away about their credit scores, more often than not, make hasty decisions. Sometimes these decisions could lead then into trouble if they cannot be undone. The key to making sound decisions is never to panic over any situation. The ups and downs of the numbers should not block your thinking process or affect your decision making capability.

Firstly, pick up that credit report that left your head spiraling. The next step is to get out of the panic mode. With a calm mind, first try to evaluate your expenses. Understand if there were any wrong decisions you made. Identify the expenses that you can cut off the next time. Before you decide to purchase an item, ask yourself if you really need it or is it a mere luxury. Plan the impact it may have on your present financial position and think how you can manage with the change. Separate your necessities from your luxuries.

Use your credit cards and debit cards wisely. They seem to work magic when you are shopping, but the magic fades off the minute you realize how much you need to repay because of their use. Every card comes with different services targeted at different populations. Identify those services that are really necessary for you, that make your life easier. Remember that you are being charged for all the services you opt for. Another simple rule to be followed is to make sure you are repaying your bills on time. A delay in repayments will make you shell out more of your precious dollars.

A man who saves his money regularly shields himself against the harsh realities of the markets. Make sure you have a monthly savings scheme. If you are one of those who lends out money to people though you have limited money yourself, you have to work hard on changing that attitude. In a situation where money has become the sole goal of people’s life, you must understand that you are subjecting yourself to high risk by lending money. Those who borrow money from others so that it can be lent should stop doing so right away. It is important that you safe guard your own future before you try to do so for others.

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