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Servicemen Given Tips to Avoid Hurting Their Credit Score

By Sally Maison
Published: Thursday, December 17th, 2009

Being a serviceman takes a lot of sacrifice that is why experts lament that many men and women who serve the United States are seeing their financial life crumble down because they are not aware of things that hurt their credit score.

Servicemen Given Tips to Avoid Hurting Their Credit ScoreSandra Little, a specialist at the Hawaiian Marine Base’s Personal Financial Management Program, notes several ways sailors and Marines ravage their credit score or ratings. Having too many inquiries on their credit report, too many card debts and loans, missed payments, and too many newly-opened accounts are just some of the top credit score damager Miss Little observed.

Lenders and financial institutions look into a person’s credit score to determine the risks he is likely to pose as a borrower. To mitigate risks for lending to high-risk borrowers, creditors usually charge higher interest rates to consumers with poor credit ratings.  Ms. Little also noted that most creditors would like to see that a potential borrower does not have more than 30 percent of balance on the items he owes.

She continued that the best way to avoid accumulating debts is to have a good financial plan on how to pay debts every month. If he cannot pay debts in full, a person must at least try to make partial payments, the Fontana, Calif., native added.

Ms. Little said whether it is the debt with highest interest or ones with the lowest balance, it is up to the person to decide. The most important and crucial thing is that he is able to make consistent monthly payments. She adds that it is best for a person to stick to his financial plan until one debt is paid in full.

Servicemen and consumers in general who are struggling with the credit are advised not to be discoursed because there are still many ways to improve their credit score. Ms. Little said one way for a poor-credit consumer to improve his rating is by signing up for a secured card.

Upon signing up for a secured card, a consumer will be required to deposit 100 percent to 200 percent of the limit he desires. A secured cardholder is still required to make monthly payments but if he fails to meet his bills, a creditor can make up for the loss through the deposit made.

Ms. Little also said that one great way of improving a score or rating is by checking a credit report for accuracy. A report could contain several inaccurate or fraudulent items which harms a credit rating or score.

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