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Basic facts About Your Credit Score

By Sally Maison
Published: Friday, July 30th, 2010

When a mistake is done, expect something undesirable to happen. There are some mistakes that do not really cause too much damage but you can’t afford to mess up with your credit score, can you? 

When you are applying for a loan, the lenders will be checking on your history with your credit report. Credit reports are provided by the three major credit report bureaus; TransUnion, Equifax and Experian and some minor agencies. When you shop for a lot of loan agencies then it will lead to several inquiries on your credit report too; simple inquiries that could hurt your score. So make sure that you become more mindful with who checks on your credit report.

But how could you prevent hurting your score while shopping around for the best loan? Approach the lenders that you have already researched for, this will lead to fewer inquiries and better score.

If you are fond of applying for several credit cards and would abandon them after, better change that habit now. A lot of accounts left open would make you a credit risk. One could possibly forget repaying open accounts especially when there are several of them. Accounts left opened and unpaid are obviously a big mistake.

It is easier for one to keep his finances and debts on track when only a few accounts are active. If you have finally decided of giving up on the other cards, it had always been advisable to keep the oldest card for credit history’s purposes.

Are you thinking that only employees could have a credit score and report and that one can only have one? Well then you are wrong for one can have three at least. Experian, Equifax and TransUnion are three major credit report providers and reports could also be provided by many other minor credit report providers.

Online transactions are the trend nowadays. We shop online and acquire quotes for cars, loans and houses. A lot prefer to make quotes online for it is easier and faster but making a lot of it might not be good for your score. Too many agencies inquiring on your report would mean you too are shopping for several loans. There is nothing wrong making online quote requests but try to limit your search as much as possible. Doing this is a simple yet effective way to keep a good score.

For students who would like to start establishing a good credit and score, try to go for the smallest amount of loan you can have. This way, it would not be too hard for you repaying. While in school, train yourself on how you could manage your finances. Limit your use of credit card when not really needed and instead of using your credit card to pay for school expenses, visit your school’s financial aid office for some advice.

Your credit score is very important for it determines whether lenders would trust you enough for a refinancing. The ways on keeping your score on track are actually easy and easier when you religiously follow them.

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