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How to maintain your credit score

By Janet Lacey
Published: Friday, October 16th, 2009

With people having difficulty making ends meet these days, maintaining a good score has become challenging.  In fact, many people are borrowing heavily from one source in order to close the debt at another place. This vicious circle will eventually cause bankruptcy, at which point no financial institution will be ready to lend you money. Hence, you need to be smart about your credit score and learn the right way to maintain them.  In order to prevent a loan from reflecting poorly on your credit score, you need to find out methods wherein you can repay your debt and maintain your credit score to some extent.

The first thing about credit score is that you shouldn’t be too worried about it if you are in a financial crisis. Most of us have had tough times and survived it, so it is normal for your credit score to fall and rise eventually. Due to panic, many people commit to hasty decisions and end up making all the wrong choices. Remember that you can’t borrow in order to end debt, as in that way, you can never get out of the debt loop. In order to close your debt, you need to work it off in some way.

Firstly, take a good hard look at how you are spending your money. The chances of finding places where you can cut back are very high. Every dollar counts, and don’t disregard anything as they all add up in the end. Since it is important that you understand how money works, you cannot afford to go out and blow all your money up and then expect it to not show on your credit score. Control yourself from spending too much on luxury items and other things that you can live without.

Next, your monthly bills should be filled or it will again affect your credit score. Since failure to make payments will cause your credit score to be affected, make it a priority to keep aside money to foot these bills. Avoid using your credit card too much, since this will again be reflected on your monthly bills. It is important that you don’t subscribe for services that you don’t require. Most people try to maintain all of their services which will then end up reflecting poorly on their score as they cannot pay all the bills. Hence, you ought to be wise and only maintain the services that you absolutely require.

Another way with which you can maintain your credit score is by ensuring that you don’t give out money when you need it in the first place. Lending out money is always a bad idea, especially to people whom you cannot pester to return it. Hence, avoid this as much as possible and hold onto your money. Considering how the present times are, it is unwise to even think about giving out this money to others when you are unsure of what the future holds for you. Moreover, it is also advisable to maintain a good savings account, as you might need this money at a later stage when things take turn for the worse.

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