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Tips on Maintaining a Good Credit Score

By Brian Anderson
Published: Wednesday, October 28th, 2009

Credit score tips are not that hard to find but, to truly make use of them, one must understand the basics and reasoning behind that magic number. Basically, credit scores are an evaluation of one’s creditworthiness or credit risk. This score is used by financial institutions to see if you are likely to miss your payments or default on a loan or debt. The credit bureaus are the ones that compile the relevant data that that affect one’s score. Generally, these credit bureaus score creditworthiness in a scale of 300 to 850 with those with a score of 850 being the most creditworthy.

There are a lot of factors that can affect your credit score. Previous payment histories, outstanding loans, and the size of the total debt held will all have an effect on your credit score. There are a lot on instances that people simply cannot make consistent payments on their interest and principal debts and when this happens, their credit scores will always take a hit. A low credit score will surely make taking new loans or getting new financing hard as banks and other financial institutions rarely give them to people with low credit scores. Next up are some credit score tips that will help you maintain or regain a good credit score.

Whenever there is a chance, one should always pay more than the minimum payment, which is usually the minimum insurance payment. This is because the credit bureaus check up not just if you pay your debts, but how long it takes for you to pay off your debt. Failing that, you should ensure to at least make the minimum payment as missing even a single payment may lead to a big reduction of your credit score. These credit score tips work because they focus on an attribute that the credit bureaus take great consideration of, your ability to pay on time.

This batch of credit score tips are directed at an item that can have a huge effect on your credit score, your credit cards. The relationship between your credit cards (how many you have, how much debt you have on them) and your credit score is extremely volatile. That is why making sure you’re in control of your credit cards will have a great boosting effect on your credit score.

One of the most common mistakes people make when it comes to credit scores is having too many credit cards. This is because, even if you maintain no balance in most of them, you can theoretically gather and take on a huge amount of high interest debt at a single time if you decide to max all of your credit cards out. By reducing the amount of credit cards you have you reduce this effect on your credit score. Another way to reduce dependence on credit cards while increasing your credit score is using a debit cart instead.

These credit score tips will no doubt help you get a better credit score. Always keep in mind that your credit score will remain high when you keep your debt low and make your payments on time.

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