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Important things you need to know about your credit score

By Sally Maison
Published: Tuesday, November 2nd, 2010

Punctuality is very important if you want to obtain good credit scores. Late payments and collections will have a severe effect on your credit report. If you are not able to pay past credits on time, do not let it hinder you form repairing your credit score. There’s still something you can do. Start paying all those credit card bills on time. The sooner you act on it, the sooner your credit report will look better. Call your credit card company if in case you can not afford your bill just yet. Do not make them think that you are not responsible enough to settle your financial obligations.
Inaccuracies cannot be avoided especially in credit card transactions. It is wise to check your credit report regularly in order to straighten up these mistakes. Since it is a bit difficult to understand credit reports, it might be a good idea to ask help from credit reporting agencies. You will receive a credit report annually, so check it for any inaccuracies. Once you discover them, immediately ask professionals to remove it because these mistakes can harm your credit score.

Try to use you old credit cards once in a while. The longer your credit card history is, the higher credit score you will get. Creditors would usually check their client’s credit score before releasing a loan, if they see that you have along history of credit, it means that you are able to pay bills on time, so they would release your loan. Short credit history means you keep on changing your credit card company for reasons like you weren’t able your bills.
Pay long overdue debts. Unresolved debts will still appear on your credit report. So even if that debt was made 5 years ago, try to go out of your way to pay it. These debts are still hurting your credit score. Student loans or unpaid medical bills are the most common debts that are left unpaid. The concerned companies may not be bothering you this anymore but your future transactions will still be affected by it. It’s better to see a ‘paid’ note on your credit report than a “delinquent account’ mark.

Adjust your credit limit. People tend to splurge because of the high credit limits that they have. They max out their credit limits in several occasions. This is not good for your credit score, as much as possible, leave a credit balance of 50%. For instance your credit limit is $2000; keep the balance below $1000. Although it is true that an active credit card account will boost your credit score, how will you be able to pay for it when the due date comes? A late credit card payment will make a very deep dent on your credit score.

Remember that your credit score is extremely important. Most business transactions that you will have in the future will be based on your credit score. If you want to apply for a car or housing loan, the companies will check you credit score. Even landlords check the credit scores of their prospective tenants.

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